Project Performance Measures for Civil Construction Projects ...and civil engineering construction areas alone. Figure 1.1 2014 forecast annual percentage change Source: Australian

UNIVERSITY OF SOUTHERN QUEENSLAND

FACULTY OF ENGINEERING AND SURVEYING

Project Performance Measures for Civil Construction

Projects associated with Different Procurement Strategies

A dissertation submitted by

Luke Seeney

in fulfilment of the requirements of

Courses ENG4111/4112 Research Project

towards the degree of

Bachelor of Engineering (Civil)

Submitted: October 2015

i

Abstract

The Australian construction industry, operating in both the public and private sectors, ‘is

the fourth largest contributor to Gross Domestic Product in the Australian economy’

(Nitschke, 2010, para. 2). Given the significance of this industry to the Australian

economy, it is critical that the way in which contractors are procured for projects, and the

way in which their performance is monitored, is undertaken with a ‘best practice’ focus

with the aim of delivering excellent project outcomes for clients.

This dissertation investigated current procurement strategies and performance measures

used on civil construction projects. Specifically, this dissertation was undertaken with the

aim of determining the most common procurement strategies and performance measures

used on civil construction projects, the relevance of these performance measures to the

current industry, the opportunity to introduce new performance measures with a focus on

driving innovation, establishing current industry thinking on procurement strategies and

performance measures, and to determine industry thoughts on future approaches to

procurement.

Using a single round Delphi study, semi-structured interviews using a feed forward

methodology were undertaken with 20 industry experts. These experts were selected

based on their employment history and knowledge regarding procurement and

performance measurement, with participants selected from private, local and state

government works agencies, engineering consultancies as well as contracting companies.

Using the Framework Approach, the qualitative data gathered in the Delphi study was

assessed for trends and consensus of opinion amongst participants regarding the areas of

investigation. It was identified that the industry continues to heavily utilise the construct

only approach to procurement, with some use of the design and construct approach.

Recession away from alternate approaches, such as alliancing, has been evident over the

past five years.

Investigations identified that the industry has come to accept performance measurement

as an embedded element of project delivery, and that the influence this has creates positive

impacts during the delivery of projects. Participants expressed that the current areas of

ii

performance measurement are reflective of the industry, and that there is not a need for

new areas to be introduced.

The concept of driving innovation through performance measurement was dismissed, and

it was found that this should be done through the adoption of a suitable procurement

strategy. Specifically, the industry nominated a preference of moving towards greater

utilisation of the design and construct approach, with the belief that this could help to

bring innovation into the industry. In addition to this, it was identified that this would also

require a change of mindset from procuring agencies who currently stifle innovation

through prescriptive specifications and standards, as well as a risk averse approach to

project delivery.

The study presents a number of additional findings regarding issues associated with

current approaches to procurement and performance measurement, as well as discussing

the limitations associated with this research, and potential future studies that can build

upon this study.

iii



ENG4111/ENG4112 Research Project

Limitations of Use

The Council of the University of Southern Queensland, its Faculty of Health, Engineering

& Sciences, and the staff of the University of Southern Queensland, do not accept any

responsibility for the truth, accuracy or completeness of material contained within or

associated with this dissertation.

Persons using all or any part of this material do so at their own risk, and not at the risk of

the Council of the University of Southern Queensland, its Faculty of Health, Engineering

& Sciences or the staff of the University of Southern Queensland.

This dissertation reports an educational exercise and has no purpose or validity beyond

this exercise. The sole purpose of the course pair entitled “Research Project” is to

contribute to the overall education within the student’s chosen degree program. This

document, the associated hardware, software, drawings, and other material set out in the

associated appendices should not be used for any other purpose: if they are so used, it is

entirely at the risk of the user.

iv



ENG4111/ENG4112 Research Project

Certification

I certify that the ideas, designs and experimental work, results, analyses and conclusions

set out in this dissertation are entirely my own effort, except where otherwise indicated

and acknowledged.

I further certify that the work is original and has not been previously submitted for

assessment in any other course or institution, except where specifically stated.

L. Seeney

0050070348

v

Acknowledgments

I would like to take this opportunity to thank and acknowledge those who have provided

assistance, support, guidance and advice in completing this research project. Without

these people, this task would have been made much more difficult.

To my supervisor Mr Paul Tilley, thank you. Your guidance on this topic, your patience

in my preparation of this project, and your constructive feedback and advice has been

greatly appreciated. Your understanding and knowledge on this topic has been invaluable

in conducting this research.

To the contractors and consultants that donated their time, and shared their knowledge

and expertise in my area of research, thank you.

To Greg Lerch of Gelly Consulting, thank you. Your support throughout this project has

been greatly appreciated, and I could not have completed this project without it.

Finally, to my friends, family and especially my wife Sharni, thank you. It has been a

long ride but we got there in the end. I could not have done this without your continued

encouragement, support, understanding and patience.

vi

Table of Contents

Abstract ............................................................................................................................. i

Limitations of Use .......................................................................................................... iii

Certification .................................................................................................................... iv

Acknowledgments ........................................................................................................... v

1. Introduction .............................................................................................................. 1

1.1. Background ........................................................................................................ 1

1.2. Procurement Strategies ....................................................................................... 2

1.3. Delivery Models ................................................................................................. 3

1.4. Performance Measures ....................................................................................... 4

1.5. Project Aim ......................................................................................................... 5

1.6. Project Objectives ............................................................................................... 5

1.7. Overview of Dissertation .................................................................................... 6

2. Literature Review .................................................................................................... 8

2.1. Introduction ........................................................................................................ 8

2.2. Procurement ........................................................................................................ 8

2.3. Procurement Strategies ....................................................................................... 9

2.4. Procurement Strategy Selection ....................................................................... 12

2.5. Procurement Strategies and Performance Measures ........................................ 19

2.6. Performance Measures ..................................................................................... 23

2.7. New areas of Performance Measurement ......................................................... 28

3. Methodology ........................................................................................................... 32

3.1. Theoretical Analysis ......................................................................................... 32

3.2. Information Gathering ...................................................................................... 32

3.3. Delphi Method .................................................................................................. 33

3.4. Semi-Structured Interviews .............................................................................. 35

vii

3.5. Panel of Experts ................................................................................................ 36

3.5.1. Panel Size .................................................................................................. 37

3.5.2. Participant Background ............................................................................. 37

3.5.3. Participant Selection.................................................................................. 38

3.6. Data Analysis ................................................................................................... 39

3.7. Framework Approach ....................................................................................... 41

3.7.1. Familiarisation .......................................................................................... 41

3.7.2. Thematic Framework ................................................................................ 42

3.7.3. Indexing..................................................................................................... 43

3.7.4. Charting ..................................................................................................... 43

3.7.5. Mapping and Interpretation ....................................................................... 43

4. Analysis ................................................................................................................... 44

4.1. Interview Participants ....................................................................................... 44

4.1.1. Participant Anonymity .............................................................................. 44

4.1.2. Participant Background ............................................................................. 44

4.1.3. Participant Experience .............................................................................. 45

4.1.4. Participant Responses................................................................................ 45

4.2. Procurement ...................................................................................................... 46

4.2.1. Procurement Experience ........................................................................... 46

4.2.2. Commonly Used Procurement Strategies ................................................. 47

4.2.3. Price Focussed Procurement ..................................................................... 49

4.2.4. Issues Associated with Price Based Procurement ..................................... 52

4.2.5. Non-Price Focussed Procurement ............................................................. 52

4.2.6. Issues Associated with Non-Price Based Procurement ............................. 54

4.2.7. Procurement Processes .............................................................................. 54

4.2.8. Future Approaches to Procurement ........................................................... 56

4.3. Performance Measurement ............................................................................... 59

viii

4.3.1. Performance Measurement Experience..................................................... 59

4.3.2. Commonly Adopted Performance Measures ............................................ 59

4.3.3. Scope for Performance Measurement ....................................................... 60

4.3.4. Relativity of Current Performance Measures to Industry ......................... 61

4.3.5. New Area of Performance Measurement .................................................. 61

4.3.6. Impact of Performance Measurement on Civil Construction Projects...... 62

4.3.7. Perception of Performance Measurement ................................................. 63

4.3.8. Issues with Performance Measurement ..................................................... 64

4.3.9. Innovation through Performance Measurement ........................................ 65

5. Discussion and Recommendations ....................................................................... 68

5.1. Procurement ...................................................................................................... 68

5.2. Performance Measurement ............................................................................... 71

5.3. Innovation ......................................................................................................... 73

6. Conclusions and Further Work ............................................................................ 75

6.1. Conclusion ........................................................................................................ 75

6.2. Further Work .................................................................................................... 79

7. References ............................................................................................................... 81

Appendices ..................................................................................................................... 85

ix

List of Figures

Figure 1.1 2014 forecast annual percentage change ..................................................... 1

Figure 1.2 Procurement strategy development ............................................................. 3

Figure 2.1 Key steps in procurement strategy development ...................................... 10

Figure 2.2 Case-Based Procurement Selection Process ............................................. 18

Figure 2.3 Key performance indicators for performance measurement ..................... 26

Figure 2.4 Innovation reporting .................................................................................. 30

Figure 3.1 Consensus seeking research techniques .................................................... 33

Figure 3.2 Interview participant breakdown .............................................................. 38

Figure 3.3 Framework approach ................................................................................. 41

Figure 4.1 Interview participants experience ............................................................. 45

Figure 4.2 Interview mode.......................................................................................... 46

x

List of Tables

Table 2.1 UK performance measures ........................................................................ 27

Table 3.1 Selected participants.................................................................................. 40

Table 3.2 Index categories ........................................................................................ 42

Table 4.1 Impact Areas ............................................................................................. 49

Table 4.2 Common Areas of Performance Measurement ......................................... 60

xi

List of Appendices

Appendix A Project Specification .............................................................................. 85

Appendix B Interview Questions ............................................................................... 87

Appendix C Interview Transcripts ............................................................................. 90

Appendix D Participant Profiles .............................................................................. 210

Appendix E Procurement Experience ...................................................................... 213

Appendix F Common Procurement Strategies ........................................................ 216

Appendix G Price Based Procurement ..................................................................... 219

Appendix H Non-Price Based Approaches .............................................................. 223

Appendix I Procurement Processes ........................................................................ 229

Appendix J Future Approaches to Procurement ..................................................... 233

Appendix K Performance Measurement Experience ............................................... 238

Appendix L Common Performance Measures ........................................................ 241

Appendix M Scope for Performance Measurement ................................................. 244

Appendix N Relativity of Performance Measures ................................................... 247

Appendix O New Areas of Performance Measures ................................................. 250

Appendix P Impact of Performance Measurement ................................................. 253

Appendix Q Perception of Performance Measurement ........................................... 256

Appendix R Issues with Performance Measurement ............................................... 260

Appendix S Innovation Through Performance Measurement ................................. 263

Appendix T Industries Ability to Change ................................................................ 269

1

1. Introduction

1.1. Background

The Australian construction industry, operating in both the public and private sectors, ‘is

the fourth largest contributor to Gross Domestic Product (GDP) in the Australian

economy’ (Nitschke, 2010, para. 2). Nitschke (2010) explains that the construction

industry primarily engages in the areas of residential building, non-residential building

and engineering construction.

After experiencing several years of growth, the Australian Constructors Association

(ACA) (2014) states that a number of Australia’s leading construction companies are

predicting a decline in non-residential construction across the majority of sectors

throughout 2014 and 2015, with an overall reduction of approximately 4.6% per annum

(Figure 1.1). The ACA (2014) further forecasts that naturally, the downturn in the

construction industry, particularly the resources sector along with the reduction in total

infrastructure projects, will create a decline in the employment sector which the

Australian Bureau of Statistics (2010) indicates, employs 70,000 people within the heavy

and civil engineering construction areas alone.

Figure 1.1 2014 forecast annual percentage change

Source: Australian Contractors Association (2014)

Project Performance Measures for Civil Construction Projects

associated with Different Procurement Strategies

Luke Seeney

2

This downturn will create an environment in which competition for projects will increase,

and could force engineering companies to look into other areas of engineering outside

that of their traditional focus. Piccioli (1988) expresses that changes in the engineering

industry in Australia over time, has meant that engineering companies have had to also

change to be successful and survive in the industry. These changes have included looking

beyond the traditional areas of a company’s engineering focus and modernising,

rationalising resources, and being prepared to be innovative and entrepreneurial.

It is important that while the industry is potentially changing, the strategies under which

the procurement of services is undertaken, as well as the way that performance is

measured is also reflective of the changing industry. From the traditional areas of time,

quality and cost, the procurement strategies and performance measures employed under

the adopted strategy should be reflective of significant innovations, technology and

strategies employed by contractors in the delivery of services. If the performance

measures are not reflective of the modern practices, for example innovative construction

techniques or the adoption of new technology, then why would a contractor invest time,

money and resources to investigate these areas which could potentially deliver time and

cost savings, while increasing the quality of the overall project outcome? This could

deliver benefits to not only the contractor and the client, but also the entity who utilises

the delivered project, typically, the general public in regards to civil construction projects.

1.2. Procurement Strategies

The Building and Construction Procurement Guide (BCPG) developed by Casey and

Bamford (2014), explains that a procurement strategy is a core project element that takes

into account the characteristics, risks and circumstances of a project or group of projects,

and through analysis of various options, determines the delivery model and procurement

method to be used to deliver the project.

The development of the procurement strategy occurs throughout the evaluation and

definition phase as part of the project management framework (Figure 1.2) and, as

explained by Casey and Bamford (2014), is critical to successful project outcomes. Put

simply, a procurement strategy is an assessment of what it is that is to be delivered, this



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being a project, understanding the elements surrounding the project, and then identifying

the most effective, value for money, risk mitigating strategy to deliver the project.

Commencement in the development of the procurement strategy as early in the project

lifecycle as possible, helps to ensure that the strategy developed is as fully informed as

possible.

Figure 1.2 Procurement strategy development

Source: Casey and Bamford (2014)

1.3. Delivery Models

Casey and Bamford (2014, p. 21) state that typical delivery models used in the delivery

of civil construction projects include:

Construct only;

Design and construct (D&C);

Managing contractor;

Construction management;

Direct managed;

Early contractor involvement (ECI);

Alliance; and

Public private partnership (PPP).

Further to this, Casey and Bamford (2014) explain that of these models, the construct

only and the design and construct models are the most commonly used delivery methods.



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Depending on the delivery model adopted in the procurement strategy, the performance

measures will vary.

1.4. Performance Measures

The measurement of project performance is ultimately defined by the overall outcome

achieved at the completion of the project (Chan & Chan, 2004). That is, has the contractor

delivered what was intended or visualised when the project was initiated and is the

outcome achieving the desired goals and objectives of the project? Although the answer

may be yes, have the underlying performance measures related to project success been

satisfactorily achieved, ensuring that not only the ultimate project outcome has been

achieved, but that the ‘optimal’ project outcome has been achieved?

Ward, Curtis and Chapman (1991) explain that typical measures of contractor

performance are related to the traditional areas of time, quality and cost. Kagioglou et al

(2001, p. 88) states that ‘although these three measures provide an indication of project

outcome, in isolation they do not provide a balanced view of project performance’.

Furthermore, Ward, Curtis and Chapman (1991) explain that typically, it is not so much

the financial or time outcomes of the project that remain after the project is complete, but

the memories of the people, and the relationships and the harmony achieved between the

client and the contractor that influences the client’s future decision to pursue a particular

procurement strategy. On this basis, Kagioglou et al (2001) argues that these traditional

measures are not sufficient to provide a full and true view of project performance.

This view opens up the area of investigation into what aspects of performance

measurement will provide a full and true view of project performance and what aspects

of performance measures are reflective of the current civil construction industry, and

whether there are new performance measures that can be adopted to reflect current

industry practice and procedures.



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1.5. Project Aim

The aim of this research project is to investigate performance measures for civil

construction projects associated with different procurement strategies used in the current

civil construction industry.

In undertaking this project, the key areas of focus will be on gaining an understanding on

industry thinking in regards to procurement and performance measurement, future

approaches to procurement, whether performance measures used on projects are

reflective of current industry practices and techniques, whether there is an opportunity for

the development of new performance measures that could provide a clearer view on

project performance, and whether innovation could be driven through the industry using

performance measurement.

1.6. Project Objectives

The research investigation will focus on key objectives related to procurement strategies

and performance measures and will include:

Research current procurement strategies used in the procurement of

contractors for civil construction projects;

Research performance measures used in the various procurement strategies to

assess contractor performance;

Ascertain the relevance of these procurement strategies and performance

measures to current industry;

Gauge an understanding of current industry thinking on procurement and

performance measures;

Evaluate the level of importance and value placed on performance measures

and the relativity of these levels to ultimate project outcome;

Identification of potential new performance measures particularly those

related to innovation; and

Ascertain if performance measurement can be used to drive innovation

through the civil construction industry.



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In undertaking and achieving these project objectives, the study will attempt to answer

the following research questions:

Are performance measures used in civil construction projects reflective of

current industry practices?

Do current procurement strategies and thinking provide sufficient scope to

adopt the necessary performance measures?

Is sufficient value placed on performance measures and the results of these

measures?

What is current industry thinking on procurement and performance

measurement?

Is there potential for the development of new performance measures that are

reflective of current industry practice?

Could innovation be driven through the industry via performance

measurement?

1.7. Overview of Dissertation

This research project is assembled with six chapters presenting the work. The remainder

of this dissertation is structured as follows:

CHAPTER 2: This chapter presents the literature review of the information related to

procurement strategies and performance measures and is the foundation from which this

study is built.

CHAPTER 3: This chapter describes the methodology utilised in conducting this research

and provides justification regarding the adopted approach. It explains the use of the

Delphi technique, the assembly of the research panel, interview process and the data

assessment technique.

CHAPTER 4: This chapter presents the findings of the qualitative data assessment using

the Framework Approach, identifies the links from these findings to the research



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presented in the literature review and presents some initial discussion related to the

findings.

CHAPTER 5: This chapter discusses the findings of the analysis and identifies the core

areas and issues to arise from the data assessment. This chapter also provides a number

of recommendations based on the research findings.

CHAPTER 6: This chapters presents the final conclusions drawn from the research,

relates these to the project objectives and aims, before finally identifying potential further

areas of work.

8

2. Literature Review

2.1. Introduction

In preparation of this research paper, review of relevant literature to the topic under

investigation has been conducted. This process assists in providing an initial insight into

the research area, presenting both supportive and objective literature. This review will

introduce the topic areas and provide a foundation from which the research will be built.

The review will cover the following areas of relevance to the project topic:

Procurement

Procurement strategies;

Procurement strategy selection;

Procurement strategies and performance measures;

Performance measures;

New areas of performance measurement;

2.2. Procurement

Before delving into the subjective and what seems to be, dark depths of procurement

strategies and performance measures, it is important to understand what it is that is meant

by procurement to help focus the areas of study and explain the context of procurement

to this investigation.

To elaborate on this, and the need to gain an understanding of the term procurement in

regards to this investigation, reference is made to the definition of procurement firstly by

a number of dictionaries. The Oxford Dictionary (2015) defines procurement in two

instances. The first explains that procurement is the action of obtaining or procuring

something, while the second definition states that it is the action of acquiring military

equipment and supplies. Looking now at the definition provided by the Cambridge

Dictionary (2015), it also states that it is the obtainment of military supplies while again,

the Merriam-Webster Dictionary (2015) states that it is the process of obtaining

something with a specific focus on military supplies obtained by a government.



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While procurement of military supplies would indeed be an interesting area of

investigation, reference to the Queensland Procurement Policy (2013, p.10) specifically

defines procurement as:

…the entire process by which all classes of resources (human, material, facilities

and services) are obtained. This can include the functions of planning, design,

standards determination, specification writing, selection of suppliers, financing,

contract administration, disposals and other related functions.

With this focus, and reference to Casey and Bamford (2014), procurement in the context

of this research is the obtainment of goods and services to be supplied in the delivery of

civil construction projects.

In procuring these goods and services, given the significant investment of time, cost and

resources required, it is typical to develop a procurement strategy to conduct the

engagement, and develop a planned approach to provide increased opportunity of

achieving the desired project objectives and outcomes.

2.3. Procurement Strategies

Casey and Bamford (2014) provide guidance on the development and implementation of

procurement strategies for building and construction projects. They state that the

procurement strategy is a fundamental document that considers the project characteristics,

risks and circumstances and is the outcome of a robust analysis to identify the

recommended delivery model and procurement method. In developing an effective

procurement strategy, Casey and Bamford (2014, p. 10) explain that it is important to:

Fully understand the project including key drivers, constraints and risks;

Assess agency and market capabilities and capacity;

Rigorously evaluate potential delivery models and procurement methods for

suitability;

Involve key stakeholders and experts as early as possible in the planning and

development process;

Challenge assumptions in order to better achieve desired outcomes; and



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Use practical analytical techniques in the decision making process.

The literature reveals that there is no common template for a procurement strategy, but

each strategy typically involves key elements such as (Casey and Bamford, 2014, p. 11):

Statement of objectives;

Summary and analysis of project objectives, requirements, characteristics,

and risks;

A review of agency and market capabilities;

An analysis of delivery model options and identification of a recommended

delivery model; and

An analysis of applicable procurement methods and identification of a

recommended method.

This development process is illustrated in Figure 2.1.

Figure 2.1 Key steps in procurement strategy development

Source: Casey and Bamford (2014)



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In addition to this explanation of a procurement system, Love, Skitmore and Earl (1998,

p.222) explain that a procurement system is ‘an organisational system that assigns

specific responsibilities and authorities to people and organisations, and defines the

relationships of the various elements in the construction of a project’.

They expand on this and explain that there are three typical types of procurement systems

or strategies categorised as follows (1998, p. 222):

Traditional (design – tender – construct);

Design and construct methods; and

Management methods.

They continue with the view that from these three categories, there are many sub-

classifications in use in the Australian industry that stem from these three main categories.

In support of this view, Gan (2010) explains that, when undertaking procurement and

determining a procurement method, a decision between a separated, integrated or

management strategy is required. The study explains that in modern construction

practices, there are three typical procurement strategies being:

Sequential traditional (design – bid – build) or separated;

Design and build or integrated; and

Management orientated including both the contracting and construction

management.

As can be seen, the three strategies identified in the study are consistent with those

identified by Love, Skitmore and Earl (1998), with Gan (2010) also going on to explain

that a number of procurement strategies exist outside of these three distinctive areas, but

are typically just variations of these with the addition of other functions.

In retrospect of this, Rooney (2006) looked into the development of Project Alliancing

and Relationship Contracting procurement approaches. These approaches are non-priced

approaches that primarily focus on the relationships, personnel and collaborative working

environments that drive teams to perform at levels beyond the norm. Rooney (2006, p. 9)



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stated that he believed ‘Project Alliancing and Relationship Contracting is evidence of a

major cultural shift towards seeking teamwork as more important than competitive

behaviours’.

Walker, Harley and Mills (2015, p. 1) also looked into alliancing and stated that this

approach ‘often provides best value and superior value for money when compared to

traditional approaches such as Design and Construct’. They cite Wood and Duffield

(2009) explaining that in Australia, the estimated value of projects delivered using this

procurement approach was ‘$32 billion’ (2015, p. 2) for the period 2004-09 but that this

method of procurement has since reduced although there is still ‘continued willingness to

embrace this type of system in Australia’. In light of this, they explain that if a significant

move towards this approach were to be made in Australia, there ‘would be a major

shortage of requisite knowledge, skills, attributes and experience within the industry for

all alliance parties’ (2015, p. 16).

With this in mind and reflecting on the literature covered to this point, it is apparent that

while procurement is the process of obtaining the desired goods and/or services, this is

typically coordinated through the selection, development and implementation of a

specific procurement strategy. This selection process is critical given that there appears

to be many strategies and approaches that can be used.

2.4. Procurement Strategy Selection

Love, Skitmore and Earl (1998) state that procurement is a key factor in contributing to

not only client satisfaction but to the success of the project, indicating that the selection

of the appropriate procurement methodology is a critical element in the development and

outcome of a project. In support of this, Alhazmi and McCaffer (2000) argued that for the

project to be successful, the procurement strategy needs to address the individual

characteristics and requirements of each project, while also taking into consideration the

technical features of the project as well as the client and contractor. Similarly, the

selection of the appropriate procurement strategy is a key factor in project success, as it

is ‘the framework that encompasses the structure of responsibilities and authorities for

participants within the building process’ (Cheung et al., 2001, p. 427).



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This leads to the premise that a direct relationship can be drawn between the performance

under the procurement strategy, the ultimate success of the project and the particular

procurement strategy selected to deliver the project, i.e. a poor procurement process

adopted during project development results in poor performance and a poor project

outcome, while a thorough and relative process considerate of the project objectives,

outcomes and client considerations results in better project performance and delivers a

satisfactory outcome.

Ireland (1982) and Barclay (1994) (cited in Love, Skitmore & Earl 1998, p. 222) identify

that within the Australian industry, the most commonly selected procurement strategies

implemented in building projects are:

Single lump sum contracts and full documentation;

Provisional or partial quantities;

Cost reimbursement;

Package deals/turnkeys;

Construction management; and

Management contracting.

Love, Skitmore and Earl (1998, p.222) state that ‘project management is excluded as it is

considered that a project manager could be applied to any procurement method’ while

also providing further insight into the common strategies and indicating that in addition

to those above, there is also:

Novation;

Design and manage; and

Contractors design and build.

This is further supported by Casey and Bamford (2014) which nominate the above

strategies as common place in the current industry while also specifying early contractor

involvement, alliance and public private partnerships as additional strategies.



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With an array of procurement strategies, and what seems to be an endless number of

iterations adapted from these, it poses the question of which strategy is the right strategy

for a project and how can this be determined?

Alhazmi and McCaffer (2000) explain that there have been numerous investigations in

the past to try and provide some clarity and solidify a process around selecting a

procurement strategy. This has included the development of multi attribute techniques,

strengths and weaknesses analysis, software packages and knowledge based expert

systems to name a few. In most instances, the main difficulties common to the studies

undertaken in this area includes (Alhazmi & McCaffer 2000, p. 176):

The models seem to ignore some important factors in the selection of the most

appropriate procurement systems;

Available options in the database of a number of existing models are limited;

Some of the models are conditional and cannot be used by any client;

Some of the models require the use of advance mathematics and are particularly time

consuming; and

A number of the models adopt a primitive approach to the selection process and limit

the number of options to be considered.

It appears that there is not a single definitive tool that can be used to select an appropriate

procurement strategy and, that in the first instance, the environment in which the project

will be undertaken needs to be considered.

Referring to Casey and Bamford (2014) identifies that the initial parameters that should

be considered when selecting a procurement strategy should firstly consider:

Does the procurement strategy comply with government and agency

requirements such as the Australian Industry Participation National

Framework?

Does the procurement strategy suit the prescribed forms of contract relative to

the delivery of this project?



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Is there a mandated procurement process already in place to deliver this

project, i.e. tender must go to the open market due to the project value?

Is the procurement process complimentary to the intended delivery model?

Dependent on the above outcomes, the process of determining a procurement strategy can

then be developed further.

Watermeyer (2012, p. 223) explained that selection of a procurement strategy can be

considered as ‘skilful planning and managing of the delivery process’ that carefully

devises a plan of action and making appropriate decisions in consideration of procurement

options and circumstances to achieve optimal outcomes. Kershaw and Hutchinson, (cited

in Watermeyer 2012, p. 223) suggested that when selecting a procurement strategy, it

should:

Include the basis for seeking tenders;

The number of contracts and work breakdown between contracts;

Publicity to attract the desired level of market interest;

Process for bidder prequalification and short listing;

Bid and evaluation process;

Process for accepting winning bids;

Terms of engagement; and

Breakdown of roles and responsibilities.

In addition to this, Watermeyer (2012, p. 233) states that a procurement strategy does not

only need to be for a single project but can be developed to deliver a programme of

projects that considers ‘the best way of achieving project objectives and value for money,

while taking into account risks and constraints’. He states that the ‘procurement strategy

is the combination of the delivery management strategy, contracting arrangements and

procurement arrangement for a particular procurement’.

Research undertaken by Sidwell and Kennedy (2004, p. 7) refined a decisional matrix

targeted at selecting ‘best practice project delivery strategies’. This research identified a

matrix consisting of an axis based on construction process and a second axis based on

‘generic actions which need to be taken to achieve project success’ (2004, p. 18). In



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constructing this matrix, the construction processes that need to be considered in

developing the procurement strategy are quoted as (2004, p. 18):

Ideas and feasibility;

Planning and design;

Construction;

Commissioning; and

Operation (including maintenance).

In consideration of the generic elements, it is necessary to consider:

Project objectives, values and excelling above normal industry standards;

Value based personnel selection;

Alignment of the team;

Sufficient funding to support teamwork;

Decisional and operational agreement;

Engagement of satisfactory feedback systems;

Accounting for life cycle costs through aligned design strategies; and

Aligned construction strategies.

It was argued that the use of this decisional matrix would provide a ‘robust foundation

for the development of a best practice guide to project delivery’ (2004, p.18).

This somewhat aligns with work undertaken by the Cooperative Research Centre (CRC)

for Construction Innovation (2001) which developed a paper-based workbook as well as

an electronic database to try and provide decisional tools to support agencies in selecting

project delivery systems. It was evident that these support tools were needed as it was

clear that poor decision making at this point in the project was leading to less than optimal

outcomes for projects.

In a similar context to this, further work undertaken by CRC for Construction Innovation

(2006) explored procurement strategies and the use of an appropriate strategy to achieve

best practice delivery. This study found that, often, agencies would not utilise the most

appropriate strategy during delivery. In an attempt to assist in the selection of a suitable



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strategy, a support toolkit was developed to aid agencies in the decision making process

when selecting a procurement strategy.

Studies conducted by Love, Davis and Baccarini (2008) exploring similar issues was

undertaken and considered quantitative and qualitative characteristics in the evaluation of

selecting a suitable procurement strategy. This study identified six steps which included

(2008, pp. 191-5):

Step 1 – Identification of project objectives and constraints;

Step 2 – Identify procurement assessment criteria;

Step 3 – Weighting of client criteria and procurement methods;

Step 4 – Procurement appropriateness charts;

Step 5 – Procurement review session; and

Step 6 – Procurement option (s)

This evaluation methodology was developed with the aim of providing organisations with

a step by step process to assist in determining a suitable procurement strategy that could

provide value for money, and move away from the default position of using traditional

approaches to procurement.

Cheung (2001), who undertook research into the area of multi attribute technology as a

selection tool, stated that typical selection of procurement strategies has been judgmental,

and subject to bias from the decision - maker, driving the need for an objective and

systematic selection model.

Contrary to this, Luu, Ng and Chen (2003) investigated case-based procurement selection

techniques in which the emphasis was placed on the experience, knowledge and previous

learnings of those involved to guide the procurement selection process and determine the

appropriate strategy (Figure 2.2). The critical element in the use of this approach is the

ability to reflect on previous projects and strategies implemented, which can act as a guide

to the likely outcome of the project, a current feature that is not included in analytical

approaches.



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Figure 2.2 Case-Based Procurement Selection Process

Source: Luu, Ng and Chen (2003)

Providing a third view on this, Cheung et al. (2001, p. 132) investigated the use of a

selection process that utilised both an objective approach using multi attribute technology,

as well as a subjective component whereby the procurement officer is ‘free to assign

importance weightings against a set of selection criteria’. The study found that the

‘multiplicity of criteria made selection difficult’ and that the subjective component

introduces personal preference and perception of a project characteristics impacting on

the decisions made by those involved in the process.

In consideration of the above, it is evident that there is no single tool that can be used to

select the actual procurement strategy that should be implemented. Each project is unique

and although similarities with previous projects as well as past experience can be used as

a guide to investigating a particular procurement strategy, it is evident that the strategy

needs to be suited to the specific project and its objectives. Given that the outcome of the

project appears to be directly linked to the procurement strategy, and that project outcome

is a function of the project performance, it is critical that the procurement strategy

considers the project performance measures to be implemented.



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2.5. Procurement Strategies and Performance Measures

In establishing the relationship between procurement strategy, project performance and

project outcome, it is important to understand how procurement methods relate and

impact on project performance.

Early studies conducted by Molenaar, Songer and Barash (1999) indicated that traditional

delivery techniques in the 1980’s focused on low-bid, price only procurement strategies

which would often result in increased claims during construction. The focus of the

procurement strategy on price only excluded many performance variables which, in this

instance, appeared to impact on the quality of the design and documentation resulting in

increased claims. This was supported by DeFraites (cited in Tilley 1998, p. 3) who stated

that ‘the level and quality of the services provided is likely to be limited’ in reference to

a selection process purely focussed on price, and that ‘this translates into additional

project costs for both the contractors and the owner’. From this, it could be implied that

the procurement strategy selected, resulted in poor project performance.

In support of this, Wardani, Messner and Horman (2006) argued that the decisions made

regarding procurement strategy greatly impacts the performance of any project and that

this can be exacerbated by the delivery method, i.e. design-build where the selection of a

poor team can impact on both the design and construction.

Casey and Bamford (2014) reveal that the link between the procurement strategy and the

performance measures comes through the adoption of either a price, non-price

(qualification based) or a combination of the two (value-based procurement) based

procurement strategy.

Price based procurement strategies focus only on the price element of the project and do

not take into account non-price criteria. The process involves the assessment of offers and

selection of the lowest conforming tender regardless of elements such as experience,

delivery approach and team member skills, all of which are elements that can impact on

the project performance. Ruparathna and Hewage (2015, p. 6) explained that this

approach to procurement ‘is the main cause of the major issues in the current procurement

systems’.



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A non-price or qualification based procurement system does not consider the price

component when determining the successful contractor but focuses on things such as

experience, past performance, team member skills, and delivery approach. This is

typically a performance based approach as the key criteria in the assessment are

performance driven measures which will be discussed shortly.

The third approach is the adoption of a value-based approach which considers both price

and non-price components. Dimitri (2013) explains that a gradual change and transition

towards the adoption of this approach has occurred in both the public and private sectors

in recent years. Deemed the best value for money (BVM) approach, this strategy allows

both price and non-price components to be assessed allowing a balance to be achieved in

obtaining a quality service at a reasonable cost hence delivering “best value for money”.

Dependent upon which approach is adopted, the strategy directly influences the

performance measures established in delivering the project. A study conducted by

Sebastian, Claeson-Jonsson and Di Giulio (2013, p. 395) looked into performance based

procurement for low-disturbance bridge construction projects. They explained that by

adopting the ‘most economically advantageous tender (MEAT)’ or value for money

strategy as opposed to the lowest price tender (LPT) approach, additional performance

measurement avenues are opened up including the ability to measure technical and

sustainable aspects as well as taking into account innovation and innovative solutions.

Two case studies were undertaken in which two bridge projects were assessed on a project

outcome level. One project was procured using the LPT strategy while the second project

was procured under MEAT arrangements. It was found that there was no significant

benefit in adopting one strategy over the other and that both delivered desirable project

outcomes. In some instances, it was actually more expensive for the client undertaking

the MEAT process as it required greater involvement from the client in the delivery of

the project, resulting in greater costs.

It was noted that although the LPT strategy delivered a desirable project outcome, the

focus on price based procurement omitted elements such as long-term project lifecycle

aspects, which would have been assessed under the MEAT procurement strategy and

ultimately lead to a better outcome in the longer term for the project. This highlights the



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deficiencies in the price based strategy when compared to the value based approach,

which could have achieved a more desirable outcome in the longer term.

Research into the impact of procurement systems on performance measurement was

undertaken by Rashid et al. (2006) in which an analysis was undertaken to determine the

impact on time, cost and quality related to construct only, design and construct and

managing contractor procurement approaches.

This study found that, of the three approaches, the construct only strategy was the slowest

of the three approaches. The approach allowed a greater amount of time to prepare and

review the design documentation and could provide greater confidence in regards to cost.

This was due to the definition provided by having a fully documented project when

entering the tendering phase. They stated that this approach allowed for greater quality

however it could be argued that this is not always the case, as this is a function of the time

and resources available during design development and documentation.

In their review of the design and construct approach, it was identified that the combination

of the design element with the construction element, allowed for a quicker delivery

timeline. This was also assisted by the involvement of the contractor in the design phase

allowing for input into the design, translating to efficiency in the construction of the

project.

The downside of this approach is increased costs when compared to the construct only

approach as a result of the risk inherited by the contractor due to the limited detail

available during the tendering phase. Despite this, often the input from the contractor

during the design stage in conjunction with the reduced costs associated with this

procurement strategy, ensures that whole of project costs are within reason.

Rashid et al. (2006, p. 10) stated that ‘it is more often found that the quality of work under

this contracting system tends to be questionable’. It was explained that this is primarily

attributed to the contractor being able to control the design and construction phase, while

the client is largely left in the dark as to what is actually occurring throughout these two

phases.



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Their review of the managing contractor approach identified similar time advantages to

that mentioned in the design and construct approach. It was stated that ‘the cost of the

project procured using this system tends to be lower than those using other procurement

approaches’ (Rashid et al. 2006, p. 11) and that increased quality can be achieved as the

managing contractor is typically highly experienced, and is also responsible for the

outcome that is delivered.

Contrary to this, a study conducted by Zillante et al. (2014, p.1) stated that ‘it is perceived

to be a common occurrence that finalised documentation for managing contract projects

are of poor quality’. Zillante et al. (2014) undertook a series of semi-structured interviews

with 8 industry representatives of whom the majority indicated that, for varying reasons,

this procurement approach did tend to lend itself to the production of poor quality

documentation. As part of the research, a case study was undertaken on a managing

contract project in which it was found that poorly prepared documentation led to ‘238

variations’, ‘340 requests for information’ and ‘just under $1 million dollars worth of

changes’ (Zillante et al. 2014, p.6). This is a clear example of the implications associated

with poor quality design and documentation.

A study conducted by Tilley (1998) further highlighted the link between the procurement

strategy and performance measures, where design and documentation deficiencies and

the associated impact on steel construction were examined. It was evident that poor design

and documentation quality was leading to significant rework and rectification, resulting

in added costs to projects which were primarily absorbed by the Contractor.

The study found that the focus on quick profits was prioritised over greater upfront costs

in relation to planning and design, which would reduce rectification and rework costs.

The paper states that the adoption of a system which is performance based, such as the

non-price or value for money based approach, rather than a price focused strategy, could

be utilised as a way to minimise quality based issues, improving the efficiency of the

construction process. By adopting a procurement strategy that assesses experience and

expertise as opposed to cost, a greater level of confidence can be assured regarding project

performance, and that the project outcome is of a high quality and standard while

minimising rectification and rework.



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It is evident that the procurement strategy influences the project performance measures,

and that the project performance measures impact the level of project success and the

project outcome, but this poses the following questions which will be examined as part

of this investigation:

What measures are reflective of project performance?

To what degree and what level of value are placed on these performance

measures and their relativity to project outcome?

Are these performance measures reflective of current industry practice?

Is there an opportunity to introduce new performance measures that are

reflective of current industry practices and technology to improve the validity

and measurement of performance?

2.6. Performance Measures

Construction Queensland (2001, p. 13) states that the Australian construction industry

has, for a number of years, ‘sought to improve performance under construction contracts’.

This is in regards to time and quality aspects of project delivery in addition to ‘minimising

disputes between the parties to construction contracts’. The study summarises a number

of performance measures that can be grouped into six categories that provide for fair

project delivery (2001, p. 21):

Customer focus;

Optimum use of information;

People involvement;

Process improvement;

Leadership; and

Strong supplier relations.

A study conducted by Bassiono, Price and Hassan (2004) into performance measurement

in construction found that, since approximately 1994, research into performance

measurement has been significant as industry has become increasingly competitive and

measurement of performance has become critical to business success. This determination

introduces the idea that significant value is placed on performance measurement and that,



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as competitors try and gain the upper hand, the development of new approaches and

technology could occur and should potentially be measured.

Further to this, it was found that financial based performance measures often provide

information that is lagging in that it reflects actions and decisions that may have occurred

by a minimum of one reporting period. Managers and the project dictate up-to-date and

mostly nonfinancial information to guide project decisions and actions.

Kagioiglou et al. (1999), Lee et al. (2000) and Smith (2001) (cited in Bassiono, Price and

Hassan 2004, p. 5) explain further that ‘the construction industry in the U.K. and many

other developed countries has a long track record of less than optimal performance’.

Investigations dating back to as far as 1944 indicate the need for change and

improvement. Latham (1994) identified that improvements to project performance could

be made by increasing the focus on design process, quality management, productivity,

training, and education while Egan (1998) highlighted areas of productivity, profits,

quality, and safety while emphasising the importance of performance measurement as

key in delivering improvement in performance of the construction industry.

A study undertaken by Crow and Barda (2001) looked at 28 projects that had been

delivered and deemed as ‘excellent projects’. It was revealed that there were several

attributes that were responsible for excellence achievement. They stated that

approximately 10% of projects achieve this excellence rating, and that the utilisation of

the identified attributes could raise this statistic. Crow and Barda (2001, p. 8) specifically

state that the following drivers were responsible for achieving excellent project outcomes:

Client leadership;

Trusting relationships;

Project initiation;

Team establishment;

Team pride;

Value management;

Stakeholder involvement;

Communication;



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Understanding the client’s business; and

Adequate budget.

Research undertaken by Sidwell and Kennedy (2004) looked at 56 elements that can play

a role in project performance. They found that four of these were crucial, specifically

(2004, p. 6):

Co-operative project teams;

Client’s competency and commitment;

Continuity of key personnel;

Equitable risk allocation.

Many of those elements identified by Crow and Barda (2001) could be categorised under

those areas identified by Sidwell and Kennedy (2004) demonstrating consistency in the

findings.

A study conducted by Dainty, Cheng and Moore (2003), although focussed on the

performance of construction project managers, argued that in the current construction

industry, simply looking at the areas of cost, time and quality are no longer sufficient

when assessing the construction manager’s performance. It was noted that these areas are

only a few of the criteria that are used to assess project performance, however this

highlights the fact that it is important to consider an array of elements that all contribute

together to ascertain a measure of project performance.

It was argued that there are many variables outside of the managers control that can

impact on performance as well as greater demands when compared to the past. It was

argued that definition of more appropriate performance measures was required ‘to

consider the knowledge, skills and behavioural inputs’ (Dainty, Cheng and More 2003,

p. 209) that could lead to improved project outcomes.

Similar to this, Robinson et al. (2005, p. 13) found that ‘clients, investors and other

stakeholders are demanding continuous improvement’ and that ‘increased reliance on

industry-specific key performance indicators’ (KPIs) demonstrates the ‘growing

importance of performance measurement’. The paper explains that traditional



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performance measurement techniques, which are dominated by financial information, ‘is

no longer sufficient for understanding the dynamic business environment’ in which civil

construction projects are undertaken.

It was argued that measurement brings attention and that improvement upon desired areas

could be achieved through sufficient measurement. Specifically, it was stated by

Kagioglou et al. (2001) (cited in Robinson et al. 2005, p.14) ‘that measurement is an

integral part of business improvement, as it is often seen as the information system at the

heart of the performance management process’.

Further studies into performance measurement conducted by Chan and Chan (2004) also

investigated the areas of project success. They identified that project performance

measurement has typically been restricted to the common elements of time, cost and

quality but that measuring success may be more complex.

The investigation developed a set of KPIs (Figure 2.3) that could be used to measure

performance, and explained that the construction industry has changed dramatically, and

that the adoption of a wider approach to performance measurement is important in

measuring project success in the current environment.

Through undertaking three case studies and assessing these against the KPIs, it was

demonstrated that the KPIs were good indicators of the performance of construction

projects over and above that of the traditional performance measures.

Figure 2.3 Key performance indicators for performance measurement

Source: Chan and Chan (2004)



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Despite the findings of these studies, research undertaken by Idrus, Sodangi and Husin

(2011) looked at the importance placed on the various areas of performance that are

typically measured on construction projects. This study found that, despite expansion into

other areas of performance measurement away from time, cost and quality, these three

areas were still ranked as the most important. It was identified that the quality of the

completed project took top priority, followed by cost and then time. In addition to these

three areas, the study determined that the most commonly used alternative areas of

performance measures, ranked in order of priority, are as follows (Idrus, Sodangi and

Husin 2011, p. 1150):

Occupational health and safety;

Labour dependency;

Contractor’s project management;

Quality of coordination by construction team;

Contractor’s capacity of manpower;

Construction flexibility;

Environment friendliness; and

Level of technology.

Further to this, research undertaken by Construction Excellence (2006) (cited by

Furneaux et al.2010, p. 5) identified a number of performance measures currently used in

the United Kingdom (UK) as shown in Table 2.1.

Table 2.1 UK performance measures

Economic KPIs Social KPIs Environment KPIs

Client satisfaction – product Employee satisfaction Environmental impact

Client satisfaction – service Staff turnover Energy use – product

Defects Sickness absence Energy use – process

Predictability – Cost Safety Water use - product

Predictability – Time Working hours Water use – process

Safety Qualifications and skills Waste removed from site

Productivity Equality and diversity Commercial vehicle movements

Profitability Training Impact on biodiversity

Construction Cost Pay Area of habitat created / retained

Construction Time Investors in people Whole of life performance –

product



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They go on to explain that there are a number of issues in measuring performance with

these summarised as follows (Furneaux et al. 2010, p. 6):

Subjective assessment;

Crude/questionable measures;

Lack of coordinating agencies;

Large number of schemes – fragmentation;

Data overload; and

Large (cash and in-kind) investment required.

It is evident in the literature above, that a greater emphasis is being placed on performance

measurement than ever before in the construction industry, as organisations strive for

improved capacity, efficiency and greater outcomes, while remaining focussed on

increasing profits. This opens up the possibility of potentially new performance

measurement areas and the investigation into current industry thinking of the status of

performance measurement. This again raises similar questions to those highlighted in

section 2.5, further reinforcing the purposes of this study in regards to:

What degree and what level of value are placed on these performance

measures and their relativity to project outcome?

Are these performance measures reflective of current industry practice?


reflective of current industry practices and technologies to improve the

validity and measurement of performance?

2.7. New areas of Performance Measurement

Having identified that the civil construction industry could potentially address new areas

of performance measurement, review of the results from the previously discussed study

by Dainty, Cheng and Moore (2003, p. 212) identified nine factors that could be

considered when defining performance measures for the assessment of a project as

follows:

Team building;



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Leadership;

Decision making;

Mutuality and approachability;

Honesty and integrity;

Communication;

Learning, understanding and application;

Self - efficacy; and

External relations.

Although the study identified and refined areas of project performance that could be used

in the assessment of a project, it was noted that ‘there is a lack of consensus among

previous studies that have attempted to address this issue’ (Dainty, Cheng and Moore

2003, p. 216) regarding adoption of new performance measures as opposed to traditional

time, cost and quality metrics.

Looking back again at the study by Robinson et al. (2005, p. 14), the investigation into

new approaches to performance measurement has found that interest has been generated

around using Egan key performance indicators, the Balanced Scorecard and the

Excellence Model. These techniques explore more than the typical time, cost and quality

areas and provide a method of measurement that considers:

Innovation and learning;

Processes;

People;

Leadership;

Partnership and resources;

Products;

Society; and

Learning and innovation.

A key finding is that although some of these techniques had been around for over 10 years

at the time of the study, movement away from typical performance measurement

techniques and the take-up of newer methods within construction organisations was slow.



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Examining the potential of new areas related to innovation and technology improvements

within the industry, Slaughter (1998, p. 226) explains that there is a ‘generally accepted

perception’ that innovation within the construction industry is uncommon, however in

actuality, it consistently occurs in various segments of the industry. Aouad, Ozorhon and

Abbot (2010) somewhat support this view in stating that, given the significance of the

construction industry to the economy, it is critical that the industry continues to develop

and adapt to the opportunities and problems that will be presented in the future.

Research conducted by Boddy and Abbot (2010) shows an increase in various segments

of the construction industry regarding reporting on innovation. This increase becomes

particularly apparent from 2004 – 2009 (Figure 2.4). This indicates a willingness by the

industry to invest into the area of innovation and that this is in fact occurring within the

industry.

Figure 2.4 Innovation reporting Source: Boddy and Abbott (2010)

With the perception that innovation in the construction industry is actually being

undertaken, or at least reported on, this poses the question of how is innovation being

measured within the industry and is any value being placed on innovation to continually

encourage investment in this area?

Aouad, Ozorhon and Abbot (2010) state that there is typical interest in the promotion of

innovation but it is unclear as to whether these policies have been successful. They



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explain that the measurement of innovation has typically revolved around scientific and

technological innovation however the construction industry does not typically innovate

in this way and is more focussed on the process and organisation based level. With this

being the case, it again puts question to two of the areas being investigated in this study:

Are performance measures reflective of current industry practice?


reflective of current industry practices and technologies to improve the

validity and measurement of performance?

Can innovation be driven through the industry via performance measurement?

32

3. Methodology

This project has been undertaken to establish current industry thinking on procurement

strategies and performance measures used in civil construction projects. In addition to

this, the project sets out to determine industry thinking on future approaches to

procurement and performance measurement, and whether innovation can be driven

through the industry via performance measurement. The first step in conducting this study

was to increase the understanding of current procurement strategies and performance

measures.

3.1. Theoretical Analysis

Initially, theoretical analysis of procurement strategies and performance measures was

undertaken to gain an understanding of current industry practice and how procurement

strategies and performance measures are utilised within the civil construction industry.

To do this, a literature review was undertaken as presented in the previous chapter,

providing the basis for an understanding of the research area. In deriving this

understanding, it was evident that industry experts would need to be consulted to obtain

their opinions and judgments, from which answers to the research questions could be

generated.

3.2. Information Gathering

To obtain this information from the industry, it was necessary to identify a suitable

approach which could be used to extract the required information from industry experts.

A figure prepared by Day and Bobeva (2005) and reproduced as Figure 3.1, provides a

summary of typical consensus seeking research methods. For this study, it was desirable

to have a low level of researcher to informant communication as well as a low level of

informant to informant communication. This was due to the limited availability of

industry experts and to ensure that the research being undertaken caused minimal

disruptions to the expert’s day to day employment. As a consequence of this, Figure 3.1

indicates that the most suitable approach is to utilise the Delphi method.



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Figure 3.1 Consensus seeking research techniques

Source: Day and Bobeva (2005)

3.3. Delphi Method

The Delphi method is a flexible research technique that has been used for a number of

years. The studies origins date back to the 1950s when the technique was employed by

the Rand Corporation on defence research (Helmer and Rescher, 1959). Skulmoski,

Hartman and Krahn (2007) explained that the use of the Delphi method is common in

undertaking PhD and masters research and is an iterative process that can be used to

gather the judgement of experts in regards to the desired topic area.

Typically, the technique involves assembling a panel of experts with knowledge relevant

to the research area, and then through the use of questionnaires or interviews, opinions

and judgements are gathered from the participants. Skulmoski, Hartman and Krahn

(2007) indicate that a typical Delphi study consists of three rounds. That is, a first round

of questions or interviews are conducted from which initial opinions are drawn. From

this, the researcher prepares and conducts a second round of questions or interviews.

These second round questions or interviews are shaped from the findings extracted in the

first round, with the goal of refining the questions to iterate towards a general consensus

or outcome from the panel of experts. Similarly, this process is repeated a third time of

which final conclusions can be drawn.

While it is understood that a three round Delphi is commonly used, it has been identified

that this can be adjusted to suit the requirements of the project. This is supported by



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Skulmoski, Hartman and Krahn (2007, p. 5) who stated that ‘there is no “typical” Delphi;

rather that the method is modified to suit the circumstances and research question’. In

addition to this, Skulmoski, Hartman and Krahn (2007, p.10) explain that ‘for master

theses, often a single Delphi study will suffice’. Further to this, the panel of experts that

have been assembled for this study are industry professionals involved in the civil

construction industry who offered their time free of charge to participate in the Delphi

study. Given the constraints around the availability of these individuals, in addition to the

time constraints associated with delivering this project, a single round Delphi study was

undertaken.

It was determined that in undertaking the study, a qualitative approach would be used to

gather the opinions and judgments of experts and that from these responses, common

themes and trends would be determined and a general consensus reached regarding the

research questions. Glenn and Gordon (2009) explain that modern approaches in the use

of the Delphi method have utilised interviews as an information gathering tool as opposed

to questionnaires. With this in mind, it was determined that semi-structured interviews

would be used.

Using semi-structured interviews would allow the development of an interview

questionnaire targeted at the research questions, while providing the freedom to explore

and probe the responses from industry experts as they arise throughout the interviews.

This approach compliments the single round Delphi method as it allows “feed-forward”

to be introduced to the interviews. Glenn and Gordon (2009) explain that this introduces

emerging consensus from prior interviews which allows for the iteration towards a

general consensus while still employing only a single round Delphi study. While it is

acknowledged that this creates differences as the interview process progresses, Glenn and

Gordon (2009) support this process by explaining that this research approach is not

seeking statistically significant results but to extract the ideas, opinions and judgments of

experts for analysis.



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3.4. Semi-Structured Interviews

The single round Delphi study utilised semi-structured interviews as the tool to engage

the industry experts and gather the opinions and judgments in regards to the research

areas. The use of semi-structured interviews has previously been adopted in research areas

of this focus. An example of this was a study undertaken by Dainty, Cheng and Moore

(2003) who used semi-structured interviews when investigating performance

measurement related to construction project managers, and determining whether these

performance measures were representative and relative to the current industry in which

they operate.

Ayres (2008) explains that semi-structured interviews are a qualitative data collection

strategy, demonstrating its suitability to this study, given the requirement to obtain

qualitative data from the industry experts. Ayres (2008) also indicates that this type of

interview technique is useful for research questions where the concepts and relationships

between them are relatively well understood. This is the case in this instance as a product

of the literature review.

Ayres (2008) explains further that this interview technique allows the researcher to freely

move back and forth through the topic questions based on the interviewee’s responses

while also using probing statements if necessary to extract further information. This again

highlights the suitability of semi-structured interviews to this study and compliments the

“feed-forward” approach discussed previously.

Provided in Appendix B are the questions that were used throughout the semi-structured

interview process. These questions were primarily open ended questions specifically

developed with the research objectives in mind, while trying to avoid leading the

interviewee in any particular direction (Ayres, 2008).

The interviews were typically conducted face-to-face at the interviewee’s place of

employment. This approach removed the need for the interviewee to travel and hence

reduced the time required for the interviewee to participate in the study. Where it was not

possible to meet with the interviewee due to locality and availability issues, the interview

was conducted via the telephone. Although telephone interviews somewhat lose the



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personal and expressional aspects of a face to face interview, Millward (2011) argued that

semi-structured interviews via telephone provided good quality textual data on a similar

level to that obtained using face to face interviews.

Millward (2011) further explained that comparisons were drawn between semi-structured

interviews to that of basically taking the form of a managed conversation in that a set of

questions are prepared prior to the interview, but the semi-structured style allows the

interviewer to ask additional questions and extract additional information based on the

interviewee’s responses. Similarly, telephone conversations are focussed on the callers’

agenda but that the flexibility in the choice of the order of the questions and the

development of the conversation with the respondent parallels that of semi-structured

interviews.

Millward (2011) concluded that when conducting qualitative research, textual transcripts

obtained from telephone interviews provided a rich data source for analysis. It was stated

that through experience in telephone interviewing, the process proved to be a valid and

effective research methodology.

In light of this, it is shown that the validity of the data gathered via interviews conducted

using the telephone, is equivalent to the data gathered via face-to-face interviews.

3.5. Panel of Experts

To undertake the Delphi study and conduct the semi-structured interviews, it was

necessary to select a number of members from the industry who were familiar with the

areas of research, practiced in the areas of research or engaged in the areas of research

through their employment. Day and Bobeva (2005, p. 108) state that a Delphi panel

‘should consist of individuals with knowledge about the substantive area of research’.

Termed as ‘industry experts’ a number of elements were considered in determining the

suitability of a potential study participant, the first of these being the number of

participants required.

Project Performance Measures for Civil Construction Projects associated with Different Procurement Strategies

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3.5.1. Panel Size Research conducted into what constitutes a suitable panel size for a Delphi study

uncovered inconclusive results. Research undertaken by Skulmoski, Hartman and Krahn

(2007) identified a number of Delphi studies that had been undertaken between the period

of 1973 to 2005. The panels in these studies varied from as little as four participants, up

to 171 participants. Delbecq et al. (1975) implied that, for a homogenous group, a panel

size of 10 to 15 was suitable, while Yong et al. (1989) stated that a minimum of 15 to 20

participants is necessary for a Delphi study. Green and Hunter (1992) argued that to obtain

sufficient data a panel size of 40 is more suitable.

A further consideration in selection of a suitable panel size was the need to allow for any

panellist attrition. In this case, this was not considered, as the study was consisting of only

a single round, therefore the possibility of a panellist ‘dropping out’ during further rounds

was not applicable.

Given that the study was to consider the opinions and judgments of construction

contractors, engineering consultancies, private works agencies as well as state and local

government works agencies, selection of a panel consisting of four members was deemed

not suitable, as this would not provide sufficient representation of these sectors. In

consideration of the above information, as well as the time and resource constraints for

this project, a panel size of 20 members was selected.

3.5.2. Participant Background

Interview participants were selected from throughout the construction industry with

various backgrounds. This approach was adopted to try and establish a greater perspective

of the industry as opposed to targeting a select industry group. Participant backgrounds

included state, local and private works agencies, construction contractors from tier 1, 2

and 3 categories, and various consultants with backgrounds in contract administration,

design, and environmental.

A breakdown of the industry representatives is shown in Figure 3.2. This demonstrates a

relatively even split amongst the various backgrounds with 38% of participants from



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state, local and private works agencies, 33% from construction contracting backgrounds

and 29% from various engineering consultancies.

Figure 3.2 Interview participant breakdown

3.5.3. Participant Selection

Upon identifying the various participant backgrounds to be targeted, a process was

undertaken to identify the particular experts that should be interviewed. This process is

summarised below:

Consult with current industry contacts regarding potential participants and

gain recommendations;

Determine recommended participants suitability based on number of years of

experience, qualifications, current employment status and current

employment role;

Initiate contact with the potential participant, explain the nature and objectives

of the study and determine their desire to participate or not participate;



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Send selected participants a copy of the interview questions to allow them to

determine if they have sufficient knowledge, experience and familiarity with

the research areas to participate in the study;

Arrange a suitable time to meet with the participant and undertake the

interview.

A key consideration in the selection of participants was to ensure that they had a minimum

of 10 years of experience. This would allow them to consider factors such as how the

industry may have changed relative to the last decade, and to provide judgment on how

the industry should evolve in the future. Participants selected for the study are provided

in Table 3.1 with further details provided in Appendix D.

3.6. Data Analysis

The Delphi study generated a large amount of qualitative data obtained through the semi-

structured interviews. In light of this, it was necessary to establish a method that could be

used to analyse this data and obtain meaningful output to address the research questions.

Exploration into techniques used in analysing qualitative data, identified an approach

termed the ‘Framework Approach’ that had been used in analysing qualitative data since

the 1980’s (Smith and Firth, 2011). This approach has been refined over time and is a

proven technique across studies of varying types (Jane and Liz, 2002).



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Table 3.1 Selected participants

ID Company Experience

(years) Qualification

IP01 Private Works Agency 17 Bach. Architectural Design

IP02 Tier 2 Contractor 15 Bach. of Engineering (Civil),

CPEng, RPEQ

IP03 Multi National Consultancy 14 Bach. of Engineering (Civil)

CPEng. RPEQ

IP04 State Government Agency 27 Bach. of Engineering (Civil)

CPEng. RPEQ

IP05 City Council Agency 14 Masters of Infrastructure Engineering

and Management

IP06 State Government Agency 30 Associate Degree Civil Engineering

IP07 Regional Council Agency 31

Bach. of Engineering (Civil)

Masters of Business Administration

RPEQ, Emeritus IPWEAQ Member

IP08 Multi National Consultancy 30 Bach. of Eng. Tech. (Civil)

IP09 Tier 2 Construction

Contractor 35 Bach. of Engineering (Civil)

IP10 Regional Council Agency 15 Bach. of Engineering (Civil)

IP11 City Council Agency 47 No formal qualification

IP12 Multi National Consultancy 23 Associate Degree Civil Engineering

IP13 Tier 3 Contractor 24 Trade – Carpenter with an open

builders licence

IP14 Local Design Consultancy 20 Masters in Urban Planning

Bach. of Science (Environmental)

IP15 Local Design Consultancy 30 Bach. of Engineering (Civil)

IP16 Tier 2 Contractor 10 Bach. of Engineering (Civil)

IP17 Multi National Consultancy 10 Bach. of Engineering (Civil)

CPEng. RPEQ

IP18 Multi National Private Works

Agency 21

Diploma Project Management, Clerk

of Works, Open Builders Licence





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3.7. Framework Approach

The framework approach is a five step process that has resemblance to that of thematic

analysis in that it identifies recurring and significant themes (Smith and Firth, 2011). The

five step process is shown below in Figure 3.3.

Figure 3.3 Framework approach

These five steps are discussed in greater detail below, outlining the methodology adopted

in analysing the qualitative data.

3.7.1. Familiarisation

The first step in the analytical approach of the qualitative data is ‘Familiarisation’. During

this stage, the key is becoming familiar with the range and diversity of the data gathered

(Jane and Liz, 2002). This was achieved through:

Undertaking all interviews - In some case it is understood many interviewers

are used in studies of this type, especially those with a large sample size,

making it difficult to be familiar with all data. In this instance, all interviews

were conducted by the sole researcher, therefore avoiding this issue;

Development of the interview transcripts – Upon completion of the

interviews, a transcript was developed summarising the opinions and

judgments made by the interviewee against each of the interview questions.

Through this process, further familiarisation of the data was obtained; and

On completion of the production of the interview transcripts, all transcripts

were further reviewed to increase familiarisation with the data.



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3.7.2. Thematic Framework

The second stage of the framework approach involves the development of a thematic

framework used to sift and sort the data (Jane and Liz, 2002). These themes will be an

outcome of those identified in the familiarisation stage but will also be shaped by the

research questions and aims. The research questions and aims have been used to shape

the interview questions which is where the connection to the thematic framework lies.

During the creation of the thematic framework, an index was developed that is applied to

the data in step three of the framework approach. The index categories largely relate to

the areas of questioning but also related to the research questions. The index categories

are shown in Table 3.2.

Table 3.2 Index categories

Index No. Index Item

Interviewee Background

1.1 Years of experience

1.2 Qualification

1.3 Typical employment role

1.4 Private industry experience

1.5 Public industry experience

Procurement Strategies

2.1 Procurement experience

2.2 Common strategies

2.3 Scope for performance measurement

2.4 Project outcomes related to price strategies

2.5 Project outcomes related to non-price strategies

2.6 Project impacts price based

2.7 Project impacts non-price based

2.8 Procurement approach that the industry should transition towards

2.9 Perception

Performance Measurement

3.1 Performance measurement experience

3.2 Typically adopted performance measures

3.3 Relevance to industry

3.4 Perception

3.5 Project outcomes

3.6 Opportunities for new areas of measurement

3.7 Innovation



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3.7.3. Indexing

During this stage of the analysis, the index categories identified above are applied to the

interview transcripts. This extracts the key information out of the transcripts related to the

specific research goals and any areas that may have developed in the interviews. In

undertaking this process, the transcripts were physically noted with the index code that

applied to each element of relevant data (Appendix C).

3.7.4. Charting

Upon completion of the indexing process, the data was extracted from the transcripts and

charted. These charts were thematic based, not individual case based and included the

information from all respondents applicable to the relevant theme/data index. These

charts will be examined in later chapters when conducting the analysis process.

3.7.5. Mapping and Interpretation

Following the charting process, the data was interrogated further, searching for themes

and elements that have developed from the interview process and relating these back to

the research questions and objectives. During this process, figures and tables were

produced based on the charted data and discussion areas generated, looking at what has

been found in undertaking the research. During this phase, the data was assessed for,

amongst other things, the following:

Defining concepts,

Mapping range and nature of phenomena,

Creating typologies,

Finding associations,

Providing explanations,

Developing strategies

44

4. Analysis

The analysis performed in undertaking this study follows that prescribed in Chapter 3.

This process yielded a great amount of qualitative data relative to the research objectives

and questions. This chapter will present the analysis of this data before discussions and

recommendations are provided in Chapter 5.

4.1. Interview Participants

4.1.1. Participant Anonymity

In undertaking this study, the methodology adopted required participants to provide

responses to a series of questions via a semi-structured interview. It is important to note

that while it is intended to try and develop a perspective of the industry in regards to

procurement and performance measurement, the responses are solely those of the

individual and not necessarily that of the company they are employed by. At the same

time, these responses can be of a sensitive nature and therefore it has been chosen to allow

participants to remain anonymous. To facilitate this, participants have been prescribed an

identification number only (Appendix D), with their name and company remaining

anonymous.

4.1.2. Participant Background

As mentioned previously in Chapter 3, interview participants were selected from

throughout the construction industry with various backgrounds. This approach was

adopted to try and establish a greater perspective of the industry as opposed to targeting

a select industry group. Participant backgrounds included state, local and private works

agencies, construction contractors from tier 1, 2 and 3 categories, and various consultants

with backgrounds in contract administration, design, and environmental. This breakdown

of industry representatives was shown previous in Figure 3.1 and did not vary from that

proposed in the original methodology.



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4.1.3. Participant Experience

In addition to the participant’s employment background being considered when selecting

potential interviewees, significant consideration was given to the participants experience

within the industry.

Each participant’s years of experience are shown in Figure 4.1. The average number of

years’ experience of the participants was 22.25 years while the median number of years’

experience was 22 years. Given that the average is almost identical to the median, this

indicates that the years of experience across all members are spread evenly around the

median value indicating that the data is not skewed significantly in either direction.

Figure 4.1 Interview participants experience

4.1.4. Participant Responses

Semi-structured interviews were conducted with 20 representatives selected from

differing areas of the construction industry. This approach allowed for a greater

representation of the industry as a whole, as opposed to focussing solely on one

particularly group of the industry, such as construction contractors. Interviews were

0

5

10

15

20

25

30

35

40

45

50

IP01

IP02

IP03

IP04

IP05

IP06

IP07

IP08

IP09

IP10

IP11

IP12

IP13

IP14

IP15

IP16

IP17

IP18

IP19

IP20

Yea

rs o

f E

xp

erie

nce

Particpant



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typically conducted face to face at the participant’s office, however in three instances,

due to locality issues, the interview was conducted via telephone (Figure 4.2). This

equated to 85% of the interviews conduct face to face, and 15% conducted via the

telephone.

Upon completion of the interviews, a transcript was developed documenting each

participant’s responses to the interview questions. These transcripts are provided in

Appendix C.

Figure 4.2 Interview mode

4.2. Procurement

4.2.1. Procurement Experience

Typically, all participants interviewed had been involved with procurement to varying

degrees. In the simplest of cases, participants had been involved purely from a tendering

perspective and acted simply in response to a procurement approach used for a project,

while other participants had been directly involved in the development of procurement

strategies. For instance, IP05 is responsible for providing corporate wide leadership and

Face to Face Interviews

Telephone Interviews



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expertise in best practice procurement and contract management for capital works

projects. Interview participants IP01, IP04, IP07, IP10, IP11, IP12, IP14 and IP15 all had

experience in utilising procurement strategies that had been determined at a strategic level

and then administered by them in the letting of works.

Participants IP02 and IP13 were from smaller construction firms and had also been

involved in the development of procurement strategies and purchasing policies from the

perspective of procuring sub-contractors for use in delivering projects.

The remainder of participants had primarily been involved from the perspective of

responding to a procurement strategy in a tendering role.

Across the board, the participants demonstrated a good level of familiarisation with

procurement strategies and processes. A summary of this experience is provided in

Appendix E.

4.2.2. Commonly Used Procurement Strategies

Upon establishing each participant’s familiarisation and experience with procurement

strategies, participants were asked for their opinion on what procurement strategies they

find are most commonly used in the procuring of services, and whether these strategies

provide sufficient scope for performance measurement. A summary of their responses is

provided in Appendix F.

In the majority of responses, it was identified that the industry is primarily using construct

only or design and construct delivery methods. This agrees with Casey and Bamford

(2014) who indicated that these models are still the most commonly used delivery models.

These two methods were also mentioned by Love, Skitmore and Earl (1998) and Gan

(2010) as two of the three typical procurement strategies. This also highlights that, despite

the works of CRC for Construction Innovation, as well as others, the tendency to utilise

traditional approaches to procurement is still the default arrangement.



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Participants indicated that there was a tendency to use design and construct methods on

larger projects, especially those that were high risk, as the Principal could offload some

of this risk onto the contractor through using this procurement strategy.

Participants also mentioned that, to a lesser extent, Early Contractor Involvement and also

Construction Management methods are sometimes utilised.

From a consultancy perspective, it was identified that it is common for consultancies to

be procured through a mix of price and non-price criteria in an attempt to ensure that not

only a good price was being achieved, but that a suitable consultant, with the right

experience, team and resources was being procured. This is seen as a positive shift in the

industry, as Tilley (1998) highlighted that the use of this approach can help to minimise

quality based issues in regards to design and documentation.

In all instances, participants indicated that the procurement strategies typically provide

sufficient scope for performance measurement with some strategies involving

overarching performance measures, while all strategies allow for the adoption of project

specific performance measurement. This indicates that the strategy does not prohibit the

utilisation of performance measurement.

It was mentioned previously that Casey and Bamford (2014) identified that the

procurement strategy and the link to performance measurement comes through the

adoption of either a price, non-price or value based procurement approach. Further to this,

it was evident through understanding the research of Cheung et al. (2001), Luu, Ng and

Chen (2003) and Watermeyer (2012) that the outcome of a project appears to be directly

linked to the procurement strategy and that this outcome is a function of project

performance measures. Given this, participants were asked a serious of questions to

establish their opinions on how the selection of a price or non-price approach impacts on

the project and how the outcome can differ depending on the approach.


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4.2.3. Price Focussed Procurement

Questions asked of participants in regards to price focussed procurement yielded

interesting results. A summation of the key issues raised and the areas that participants

thought this strategy detracts from is provided in Appendix G.

The majority of participants believed that by adopting a price focussed procurement

strategy it could lead to detrimental impacts. These are shown in Table 4.1.

Table 4.1 Impact Areas

Procurement Approach Impact Area

Price Based Strategy

Cost

Time

Quality

Omissions and Rework

Disruptions

Safety

Experience of Personnel

Relationships

Corner Cutting

Fit for Purpose Solution

It was found that the most prominent issue participants believed is associated with a price

based procurement strategy, is that it will often lead to a greater number of variations as

contractors try to recover costs due to the submission of a low price. This viewpoint is

supported by early research conducted by Molenaar, Songer and Barash (1999) who

found that price only strategies often resulted in increased claims during construction.

A secondary impact associated with this, was that it led to conflict and detrimental

impacts on relationships between the principal and the contractor due to the claims. This

is of significant concern as it negatively impacts on trusting relationships, team pride, as

well as the communication elements of the project, which were all key drivers identified

by Crow and Barda (2001) in achieving excellent project outcomes. It is important to note

however, that greater negativity towards price based procurement was shown by the

participants from design consultancies and state, local and private works authorities.



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The majority of contractors felt that, just because a strategy is price based, it will not

necessarily lead to a lesser outcome had a non-price approach been adopted. This was

also supported by IP05 who is employed by a large city council. IP05 believed that much

of this has to do with the culture of the contractor and their approach to delivery. IP05

indicated that, in his experience, if a contractor is a ‘hard nut’ contractor, they will always

try and gouge you on variations regardless of procurement approach and regardless of

how little or how great the dollars are that are involved in the project. IP05 also mentioned

that a price driven strategy may simply mean that the smartest, most efficient contractor

comes out with the lowest price and genuinely does a good job.

This view was supported by IP13 who stated that price driven strategies made them

approach tendering with a view of thinking harder and smarter about how the project can

be delivered, while still maximising the outcome and minimising the cost. IP13

acknowledged that there will always be companies who have very low margins and that,

at the moment, there are even companies adopting negative margins to win work as the

market is very saturated at present. IP13 explains that this is being seen more and more

as consultants are also in a saturated market that is price driven with documentation being

produced to a lesser quality than usual. IP13 identified that poor quality documentation

provided in tender packages is leading to opportunities for significant variations

throughout the delivery of the project and that hundreds of thousands of dollars are being

won on single line items in specifications that are not correct. IP13 explains that it comes

back to the drive and culture of the company though and that ‘our company will often try

to clear up any issues during the tendering phase to allow us to provide a good price to

the client that delivers the outcome they are chasing without gouging them on variations’.

IP13’s opinion was also supported along similar lines by IP09 who stated that, for 18 out

of 35 years of experience, ‘procurement had been solely based on price’. ‘Our typical

view is that if a contractor thinks he can deliver it for ‘x’ amount of dollars then go for

it’.

It is evident that it depends on the project in that if a project has high risks and there is

the potential for a lot of changes, a price based approach will be not necessarily be the

best approach to use. IP09 states that ‘if the project is well defined, with good quality

documentation then I can’t see why it is not purely just on price’. This is emphasised by



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the fact that many works authorities use a pre-qualified panel of contractors to go out to

tender to. IP09 argues that ‘if you are on the panel, you obviously meet the requirements

so why should anything else, but, price be considered’? IP09 explains that this is made

worse by organisations like the Department of Transport and Main Roads (TMR) who

can utilise an unusually low bid rule if a bid is lower than the mean bid by a certain

margin, which can result in the tenderer either being removed from the tender assessment

or being asked to justify their bid.

In opposition to this, it is important to consider the view point of works agencies,

especially those who are of a smaller nature such as local regional councils who are

heavily scrutinised on spending given the political environment in which they operate.

IP07 stated that previously, they had always had a heavy focus on price and that there had

been incidences where this had ended disastrously. In one instance, a contractor had been

engaged on the basis of lowest price to construct a new bridge. During the delivery of the

project it became evident that there were significant capability and experience issues with

the contractor. This resulted in contract management costs doubling to manage the

contractor and get the project completed.

Similarly, IP01 voiced that in the past, there had been price driven strategies within their

organisation with little focus on performance measurement and non-price criteria. This

philosophy had led to increases in project costs due to poor quality documentation, corner

cutting, a lack of resourcing, time delays, and large variations all of which contributed to

increasing project costs. IP01 believed that had the focus and approach been different

from purely price, this could have been avoided. This viewpoint is supported by DeFraites

(cited in Tilley 1998, p.3) who stated that ‘the level and quality of the services provided

is likely to be limited’ in reference to a selection process purely focussed on price and

that ‘this translates into additional project costs for both the contractor and the client’ as

was the case in the experience of IP01.

In consideration of the points above, it would appear that the adoption of a price based

approach is not necessarily the best strategy from the client’s perspective and that

adoption of this approach can leave them exposed to being taken advantage of if the



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contractor does not act with client focussed intentions. In saying this, participants were

also queried on their thoughts regarding non-price or value based procurement.

4.2.4. Issues Associated with Price Based Procurement

In general, it appears from the responses that price based procurement can leave the client

exposed to potential shortfalls in contractor experience and capability. Further to this,

there was a common theme that price based procurement results in contractors seeking

variations to a greater extent than they would had the procurement strategy adopted a non-

price or value based approach. Whether this is in fact the case is outside the scope of this

study, however in consideration of responses from participants IP09, IP10, IP11 and IP13,

if a project is well documented, with a tight project scope and the client is clear in regards

to what they want, then there should be no reason for significant variations or increases

in construction costs. This was stated well by IP09 who stated that ‘if there are a large

number of unknowns, with significant risk of changes then a price approach will not work

and an alternative approach should be sought’.

4.2.5. Non-Price Focussed Procurement

In an attempt to gain an understanding of participant’s thoughts on non-price

procurement, questions were asked of participants in regards to non-price strategies. In

part, this was a deliberate act to solidify their thoughts regarding the differences that a

price or non-price approach can make to a project.

In a perfect world, responses would have been opposite to those discussed in the previous

section whereby participants often expressed the opinion that a price based strategy was

detrimental to the delivery of the project and detracted from areas such as cost, quality,

safety and time. Review of the responses in regards to non-price procurement, which have

been provided in Appendix H, identified mixed responses from the participants and there

was not a clear distinction on whether non-price approaches would or would not deliver

a better project outcome.

While many participants did believe that a better outcome could be achieved, as non-price

approaches gives consideration to elements such as past performance, experience,



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resources and capability, participants equally expressed the view that adoption of a non-

price approach does not guarantee a better outcome and that it is very much dependent

upon the contractor themselves.

IP01 expressed the opinion that it is fundamentally the personality meshing of the team

that is going to result in the best outcome as ‘they understand each other, they

communicate with each other, and they work together to come up with the best result’.

Regardless of the procurement approach used, generally if all parties are satisfied with

the project budget, the consultant will be happy, the contractor will be happy and the

client will be happy. IP01’s belief was that ‘happy projects are typically successful

projects’.

Similarly, IP08 indicated that a non-price approach will not necessarily yield a better

project outcome but more so there needs to be a good balance between both price and

non-price criteria to ensure value for money. This allows for the right team to be dedicated

to the job with sufficient resources, time and cost to deliver the project while still ensuring

that costs do not get out of hand.

It is interesting to note that this participant expressed the opinion that non-price strategies

require the tenderer to think harder about how they are going to deliver the project and

have a sound methodology, process and systems in place to demonstrate to the client that

they can effectively deliver the product. This is a similar response to IP13 in the previous

section who stated that a price approach made them think harder and smarter about how

they can deliver the project to minimise costs. From this, it is instigated that both

strategies generate this thought process, but that a non-price approach creates greater

transparency as the tenderer can be required to document their delivery approach as part

of their submission.

Interview participants IP2, IP4, IP6, IP7 and IP12 all believed that adopting a non-price

approach will yield a better project outcome when compared to a price driven strategy

and that this is primarily due to factors such as the ability for a non-price approach to

service a project to a greater level, the quality will improve, timeframes will be more

realistic and that relationships between the contractor and principal will be greater which

is important for future projects.



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4.2.6. Issues Associated with Non-Price Based Procurement

From the participant responses, it was identified that some issues were associated with

adopting a non-price approach. IP06 indicated that non-price approaches can inflate costs

compared to price only tenders, which was supported by the view of IP08 who stated that

it is always important to maintain an element of price to ensure that costs remain in check

with the project budget.

A common issue identified by participants was that non-price approaches are made

difficult by the subjective nature of the assessment criteria. IP02, IP04 and IP05 all voiced

concerns that non-price criteria make it difficult to justify decisions due to the subjectivity

with assigning a score to categories such as experience, local presence and team. Areas

such as these are very difficult to quantify as opposed to price, where one dollar is going

to always be less than three dollars.

Some participants expressed the opinion that a non-price approach can create additional

costs to a project, primarily upfront costs associated with tendering, however the general

consensus was that, in regards to whole of project costs, there does not generally appear

to be additional costs associated with adopting a non-price approach.

4.2.7. Procurement Processes

Participants were asked questions relating to procurement processes to establish whether

participants thought improvements could be made to how construction contractors are

procured for civil construction projects. Appendix I contains the responses from the

participants which demonstrates that there are some differences of opinion between the

views of the procuring agencies and the construction contractors.

Participants IP01, IP04, IP05, IP06, IP07, IP10, IP11, and IP18 are all from agencies who

procure construction contractors to deliver projects. These participants all expressed the

typical view that procurement is usually a straight forward process due to the

organisations having clear procurement processes and policies in place. While in some

instances it can be a time consuming task, it is not so much a difficult process. IP10 did

indicate though, that in smaller agencies, a lack of training and understanding of



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government legislation can sometimes make it difficult for procurement officers to

determine what is required regarding the correct procurement approaches and how to go

about procuring the required services.

Providing an insight from a different perspective, IP18 indicated that while the process

of undertaking procurement is not difficult, procuring good quality service providers with

the correct skills and experience for the job can be difficult. IP18 attributed this to the fact

that, despite a slowdown in recent times, many highly skilled trades people and engineers

are still lost to the mining and gas sector.

In light of the views expressed above, opinions from participants from both the consulting

and contracting sectors expressed differing opinions on procurement processes to those

discussed above. While there was general agreement that many agencies do have well-

structured procurement procedures and policies, there are a number of factors that

contribute to making procurement difficult, specifically:

Subjectivity associated with non-price criteria;

Manipulation of non-price criteria assessment to select the desired contractor;

The requirement of government agencies to be particularly transparent in their

procurement processes increasing the documentation requirements;

Lack of understanding from government agencies regarding their own

strategies, procedures and policies;

Influx of foreign workers employed by procuring agencies who do not have

an understanding of the organisations procurement policies and procedures;

Poorly scoped briefs making it difficult to understand the desires of the client

and to prepare a correct, well scoped and well priced bid;

Poor quality documentation;

Outdated specifications stipulating products that have not been made for a

number of years;

Short time frames;


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• Approaches such as ‘Expression of Interest’ that do not require the same

justification or level of scrutiny as full tender processes, allowing procuring

agencies to easily eliminate tenderers and choose a desired select few; and

• Having to deal with client nominated suppliers;

Of the points mentioned above, there was a recurring theme from respondents that the

combination of short tendering response time frames, a lack of quality documentation and

scope definition, in addition to a lack of client understanding of the project requirements,

are all contributing factors creating difficulties with current procurement practices for

civil construction projects. Issues surrounding subjectivity and manipulation of non-price

criteria appeared to be more of a frustration to the industry as opposed to an actual

difficulty with procurement.

4.2.8. Future Approaches to Procurement

Given the importance of the construction industry to the Australian economy, a critical

element was establishing the industries thoughts on future approaches to procurement and

trying to establish whether there was an industry preference in regards to procurement

strategies. Participants were queried regarding their thoughts on future approaches to

procurement, with these responses charted and provided in Appendix J.

It is evident that responses were of a similar nature across the majority of participants

with clear trends identified. These trends included:

• A preference towards a combination of price and non-price criteria used in the

tendering phase and assessment;

• A preference towards the use of pre-qualification panels for consultants and

contractors for the delivery of civil construction projects;

• A transition towards the use of performance driven specifications as opposed

to prescriptive specifications that are typically utilised on current civil

construction projects;

• In situations where the project is small in size and dollar value, has low risk

and is of a relatively simple nature, a construct only approach is preferred;



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In situations where the project is of a medium to larger size and dollar value,

has medium to high risk and is of medium to high complexity, a preference

was shown towards the design and construct procurement approach; and

The preference of alliance and collaborative type approaches to procurement

has receded over the last five years.

It is interesting to note this last point and the trend away from alliance approaches in that

Rooney (2006, p.9) looked into the development of Project Alliancing and stated that this

approach ‘is evidence of a major cultural shift towards seeking teamwork as more

important than competitive behaviours’. From the data, it would appear that this trend is

somewhat being reversed as approaches move back towards more traditional construct

only and design and construct approaches. IP20 believes that the trend away from alliance

approaches is a reflection of the current economic environment of the civil construction

industry and that the reduction in work has ‘made contractors hungrier and clients have

probably worked out they can get better value using competitive price procurement

approaches’.

This was also supported by IC16 who stated that the industry has gone away from alliance

approaches and is unlikely to go back this way. IC16 stated that this approach ‘creates

laziness in engineers’ as the alliance approach does not require the same attention and

focus on quantities and the work being performed as hard dollar contracts do.

This recession away from alliancing was also observed by Walker, Harley and Mills

(2015, p.2) who cited Wood and Duffield (2009) in stating that the ‘level of alliancing

has reduced’ although they did explain that there is still a significant ‘willingness to

embrace this type of system’.

Of the points mentioned above, it is particularly important to focus on the responses and

tendency of participants to nominate the design and construct procurement approach on

projects, other than those of a simple and low cost nature, as the preferred procurement

approach.

It is evident from the responses that this approach is preferred due to the opportunity it

provides for the contractor to become involved in the project at an early stage and have



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input into the design. This involvement allows for input from different aspects which are

sometimes not given due consideration in a typical design only approach. These aspects

include the consideration of construction methodologies, future maintenance of the asset,

as well as a vast amount of construction knowledge that can help to optimise the design

solution.

From the responses, it is evident that participants believe that this approach to

procurement can provide sufficient benefits in regards to cost savings for projects.

Specifically, IP20 expressed the belief that this approach could allow the delivery of more

infrastructure at the same cost, as the contractor is ‘motivated to identify the optimum

design solution that meets the functional outcome of the project but does not necessarily

gold plate the design’. This was supported by IP19 who expressed the opinion that once

the contractor is on site, it is ‘difficult to change the design even if there is a better way

to do something or a better design solution’. This can create unnecessary costs to the

project that could have been avoided had a design and construct approach been adopted.

Emphasising this point, IP13 stated that in regards to consultants ‘a lot of firms are

backwards when it comes to understanding construction and methodologies’.

Adding further support to utilising this approach in future approaches to procurement,

IP18 believed that this approach helped to reduce issues associated with design and

documentation typically experienced in design only approaches. IP18 indicated that in

approximately 15 years, he was ‘yet to deliver a project that had good quality, complete

and accurate documentation’. He expressed the belief that this was due to a lack of

required skill sets and experience in engineering consultancies and that by using a design

and construct approach, some of these shortfalls can be mitigated through the

involvement of the contractor.

While there was a clear consensus amongst the group regarding a move towards design

and construct procurement approaches, it is important to understand that, as explained by

Rashid et al. (2006, p.10), ‘it is more often found that the quality of work under this

contracting systems tends to be questionable’. Rashid et al. (2006) explained that this was

primarily attributed to the contractor being able to control the design and construction

phase, while the client is largely left in the dark as to what is actually occurring throughout

these two phases. This exact issue was voiced by IP15 who has been heavily involved in

procurement from a state government perspective. IP15 mentioned that the issue with the


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design and construct approach is that ‘you loosely get what you want, but not specifically

because the control around the design has been lost by the client’.

4.3. Performance Measurement

4.3.1. Performance Measurement Experience

In all cases, interview participants displayed at least some experience in regards to

performance measurement of civil construction projects. IP01 and IP08 explained that

they had minimal experience, however were aware of the concepts, requirements and

reasoning behind performance measurement. All other participants expressed this same

understanding and in addition to this, had been involved with performance measurement

through the preparation of performance reports, participating in performance workshops,

monitoring performance, having their performance monitored and through the ranking

and scoring of performance.

In consideration of the responses from participants regarding their experience with

performance measurement, it was evident that the group demonstrated a good level of

familiarisation and experience with performance measurement. A summary of this

experience is provided in Appendix K.

4.3.2. Commonly Adopted Performance Measures

Upon establishing each participant’s familiarisation and experience with performance

measurement, participants were asked for their opinion on what performance measures

they find are the most commonly used in the measurement of performance for civil

construction projects. A summary of their responses is charted in Appendix L.

The majority of participants indicated that the traditional areas of cost, time and quality

are always measured, but that often, a number of other areas are also typically measured

these days as shown in Table 4.2.


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Table 4.2 Common Areas of Performance Measurement

Environment Reliability

Traffic Management Organisational Structure

Safety Experience

Community Past Performance

Relationship Management Communication

This demonstrates that the measurement of performance has evolved from the traditional

areas of time, cost and quality and also indicates that agencies are understanding the

importance of performance measurement, as investment has been made in developing this

field. This was also mentioned by Bassiono, Price and Hassan (2004) who mentioned that

research into performance measurement has been significant since 1994 as it had become

critical to business success.

In studies conducted by Latham (1994), Egan (1998), Crow and Barda (2001),

Construction Queensland (2001), Dainty, Cheng and Moore (2003), Chan and Chan

(2004), Sidwell and Kennedy (2004), Robinson et al. (2005), and Idrus, Sodangi and

Husin (2011) many of the performance measures mentioned about by the participants

were identified in these studies as being key measurables in delivering great outcomes for

projects. This indicates recognition of performance measurement from the industry in the

delivery of civil construction projects, and demonstrates investment in performance

measurement to potentially improve projects outcomes.

4.3.3. Scope for Performance Measurement

To assist in establishing the relationship between procurement and performance

measurement, participants were queried regarding whether they thought procurement

provided sufficient scope to allow for performance measurement and whether the

procurement approach prohibited performance measurement in any way. Participants

responses have been charted and provided in Appendix M.

From the responses, it was clear that the selected procurement approach does not typically

prohibit performance measurement, it more so encourages it by often providing

overarching project performance measures and then allowing the adoption of project

specific performance measures as seen necessary by the procuring agency.



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It was evident that some performance measures, typically related to cost and quality are

dictated through state and local government legislation in regards to the procurement

strategy. Study participants indicated that, in addition to these measures, it is common

place to include performance measures specific to the project and its characteristics.

4.3.4. Relativity of Current Performance Measures to Industry

A key area of this study was to establish whether it was thought that current performance

measures are relative and reflective in the delivery of civil construction projects

undertaken by contractors. Study participants were queried in regards to their opinions on

this area which are charted and provided in Appendix N.

The study revealed that there is a general consensus of opinion amongst the participants

that current performance measures that are monitored on projects are reflective of the way

the industry operates. The common areas were mentioned previously in section 4.3.2,

with participants indicating that these areas are a fair representation of the key

performance areas that a contractor should be measured against.

It was mentioned that while these areas are reflective of the industry operations and

practices, there are a number of issues associated with measuring these areas. The issues

are discussed later in section 4.3.8.

4.3.5. New Area of Performance Measurement

Upon establishing whether performance measures are reflective of the industry, a

secondary element to this was whether new areas of performance could or should be

monitored. Responses in regards to this have been charted and provided in Appendix O.

As expected, given the findings from section 4.3.5 indicating that current performance

measures are reflective of the way the industry operates, there was a general consensus

that current areas are typically sufficient in regards to monitoring the performance of

contractors and that there are not necessarily any specific new areas that should be

monitored. There was some mention of potential links to innovation through performance



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measurement and cost incentives as well opinions that rather than measuring new areas,

agencies should focus on perfecting the measurement of current areas. These findings

will be further addressed in sections 4.3.8 and 4.3.9.

4.3.6. Impact of Performance Measurement on Civil Construction Projects

With evidence that investment into, as well as a greater focus from agencies on

performance measurement has been observed in the construction industry, participants

were queried as to what impact they thought performance measurement had on a civil

construction project. Participant responses are provided in Appendix P.

It is evident that there is a resounding consensus that performance measurement has a

positive impact on a civil construction project when it is implemented. Participants

indicated that while performance measurement may not change the end product that is

delivered, as the contractor is required contractually to deliver this product at project

completion, the most noticeable impact of performance measurement is in the delivery of

the project. This was expressed well by IP15 who stated that ‘performance measurement

more so changes how the project is delivered, not so much what is delivered’.

It is evident that in undertaking performance measurement, it provides the contractor with

a set of measurable targets that they can set out to achieve. IP04 elaborated on this point

stating that ‘it concentrates the contractors mind on what the client really desires’. This

was supported by IP20 who stated that ‘it aligns the contractor and client a bit closer and

opens up discussion around the measures’.

By implementing performance measurement on projects, it allows for key areas to be

monitored and through monitoring these areas, the contractor and client can respond

accordingly, dependent upon what the measure is indicating. This is exemplified in the

opinion of IP12 who stated that performance measurement ‘gives direction’ and that ‘you

can’t underestimate the early warnings about how you are travelling, I follow this

religiously as it gives you a good heads-up about how you are travelling’. In addition to

this, it was evident that performance measurement assists in project learnings which are

transferable to future projects.



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It is important to note though, that there was a general consensus that for performance

measurement to have a positive impact on a project, it must be implemented and utilised

well and there must be an element of ‘buy-in’ from all stakeholders.

4.3.7. Perception of Performance Measurement

With evidence suggesting that performance measurement has a positive impact on a civil

construction project as discussed in section 4.3.6, the study delved further to gain an

understanding of the general perception of performance measurement across the industry.

Participant responses in this regard are provided in Appendix Q.

There was a consensus amongst study participants that performance measurement is

widely accepted across the industry and that it has become embedded as part of project

delivery. It was evident that many agencies have well developed systems in place to

support performance measurement and this ensures that the tasks associated with

undertaking measurement are relatively simple for all involved.

It was interesting to note the differences in perception amongst contractors compared to

those of private agency, as well as local and state government agency members. There

was a belief from some contractors that performance measurement could lead to a

competitive advantage if they received high ratings in regards to performance

measurement on a project. They believed that this could lead to the award of more work

in recognition of high performance on previous projects. This was countered by a general

consensus from procurement agencies that performance measures helped them to ensure

that contractors were performing satisfactorily and that just because one contractor

performed satisfactorily and another performed above satisfactory, this would not directly

lead to one contractor being awarded more work than the other. The focus here was

simply to ensure that the contractors were performing satisfactorily and meeting the

minimum performance requirements. The attention is more so on those contractors who

are falling below the minimum standard as opposed to those that are excelling far beyond

this. This highlights a discrepancy in the alignment of the industry on the aims of




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4.3.8. Issues with Performance Measurement

With performance measurement becoming increasingly important on civil construction

projects, opinions and judgements were sought regarding issues with performance

measurement currently experienced by the industry. Participant responses have been

charted against this area of focus and are provided in Appendix R.

Of the issues raised, the most consistent of these across the participants was the issues

performance measurement causes in regards to the relationship between the contractor

and the client when performance is being measured as poor or unsatisfactory. It was clear

that the issue of poor performance creates conflict between the contractor and the client

and can often create tension in the delivery of the project. This was expressed well by

IP06 who stated that ‘it can be emotionally draining due to difficult conversations with

contractors in environments that can already be high pressure and high stress’. This can

become amplified given that many of the measurement areas are subjective, leading to

further disagreement. This was highlighted by IP05 who explained that although records

may indicate a high number of Requests for Information from the contractor, is this the

result of ‘an incompetent contractor, a poor design with poor documentation, or a difficult

superintendent?’.

The subjectivity of the measurement areas, was consistently identified by the participants

as a significant issue in the measurement of contractor performance, with this being

amplified in a civil construction environment, as many of the activities themselves are

difficult to quantify. An example was provided by IP04 with reference made to the

manufacturing industry in which the measurement of defective products is simple. If it is

defective, it is defective. IP04 went on further to explain that the civil construction

industry is not like this and even on objective areas such as a completion date, there are

so many variables that can impact on this, that subjectivity is brought back into it.

Although advances have been made by some organisations to try and remove some of the

subjectivity through the introduction of matrices explicitly stating how a subjective area

is measured, the systems themselves are somewhat subjective as they rely on the opinions

and judgements of those carrying out the monitoring. This was expressed by IP15 who

stated that ‘the issue with many systems is that they are a consensus system, where the



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client scores the contractor and the contractor scores themselves and then you meet in the

middle’. This highlights the subjectivity of the system itself, and also indicates that the

actual measurement of performance is not entirely a true reflection of the client’s

perception of the contractor.

It was expressed that there are generally sufficient systems and processes in place to

support the measurement of performance in the larger organisations, while smaller

councils have difficulty in justifying the investment in these systems and as a result, often

do not have appropriate tools for performance measurement. Despite the systems and

processes of the larger organisations, there was a general consensus that there is a lack of

resources and training of these resources to satisfactorily capture, assess and take action

from the data. It was apparent that once the data is captured, it is typically discussed in

monthly performance meetings but little is done with the data beyond this point. This

leads to few outcomes being generated from the captured data.

4.3.9. Innovation through Performance Measurement

In an attempt to determine whether innovation could be driven through the construction

industry via performance measurement, participants were queried on their opinions and

judgements as to whether performance measurement could actually drive this. These

responses have been charted in Appendix S. In addition to this, participants were queried

as to whether they thought the construction industry is slow to change, develop, and adopt

new processes or techniques, as this is also an indicator on the ability of the industry to

innovate. These responses have been charted in Appendix T.

It was evident from the data that trying to drive innovation through performance

measurement was not generally seen as an approach that could encourage this. This was

primarily due to the fact that performance measurement is undertaken during the

construction phase of a project at which point, there is often little option or time available

to make any significant changes or pursue innovation. Despite this, there was a general

consensus amongst study participants that they would like to see a greater push from

procuring agencies in regards to innovation.



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It was determined from the data, that rather than try and drive innovation through

performance measurement, this should more so be pursued through the procurement

strategy. There was clear consensus amongst the group that not only does the procurement

strategy need to drive innovation, there needs to be incentives tied to this to encourage

the pursuit of innovation through strategies such as the sharing of cost savings.

Participants indicated that there is significant opportunity to be innovative in the current

construction industry in Queensland on civil construction projects. This was highlighted

in a response by IP03 in which their organisation utilises many techniques throughout

other states in Australia, but trying to bring these approaches to Queensland has been met

by tough resistance. This was further highlighted by IP09 who indicated that Queensland

sees itself as a leader in regards to the use of foam bitumen pavement, despite this being

used overseas for decades. It was clear that the general theme was towards the use of tried

and true techniques, as opposed to looking into alternatives, and that the emphasis was

on minimising risk as much as possible.

It was extremely evident in the data that there is a general shift required in the thinking

of procuring agencies in regards to innovation and that the industry will continue to be

stifled on the innovation front unless this shift occurs. This is highlighted by a response

from IP04 who stated that the approach to innovation ‘is especially bad here in

Queensland and is the worst I have seen throughout my career in the United Kingdom

and Australia’. This is further highlighted by a response from IP03 who stated that ‘when

I come up to a project in Queensland, I take a step back in time to some extent’.

The data indicates that this approach to innovation, or lack thereof, is being driven by

prescriptive specifications and the use of standards being applied as if they are cast in

stone. This prescriptiveness is being driven by risk averse state and local government

agencies looking to minimise their exposure to risk as much as possible. IP04 states that

the government ‘have taken conservative to a new level in regards to innovation’. This

approach to risk mitigation can be somewhat understood from a local government

perspective, especially in smaller regional areas, as the cost to pursue innovation can be

high, especially if the outcome is undesirable, but from a state and federal government

perspective, the industry is calling for change.



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This change needs to be driven through all levels of the procuring agencies and not just

talked about at the top. Aouad, Ozorhon and Abbott (2010) explained that there had been

typical interest in the promotion of innovation but it is not clear as to whether these

policies had been successful. In response to this, the participants indicated that in the past,

there has been much talk at the top levels about innovation and pursuing alternatives, but

that is as far as it gets. The message is not delivered to the ground levels who are more

focussed on delivering the project right now, at the right cost and with the least amount

of headaches. From this, it can be assumed that these policies have not been successful.

Review of the responses from the participants identified that a change towards more

performance driven specifications and a move away from the prescriptive environment

the industry currently operates in is needed. This will help to bring innovation back into

the industry and allow contractors the freedom to pursue alternatives to the current

approaches as emphasised by Molenaar, Songer and Barash (1999, p.56) who stated that

‘performance specifications are used in the design and construct context to encourage

innovation from the offerors’. This again ties back to the procurement strategy and the

consensus from the participants about a move towards design and construction strategies,

as Molenaar, Songer and Barash (1999) explains that a design and construct approach is

a performance-oriented approach as opposed to a prescriptive approach. Whilst true, it is

important to highlight the fact that in some instances, even using a design and construct

approach, a design can be largely developed before going to design and construct, and

that to breed innovation, the contractor needs to become involved prior to significant

design development.

By exploring these alternate techniques, it can help to deliver more efficient and effective

processes that can reduce the delivery costs of infrastructure. This was highlighted by

IP09 who stated that from experience in delivering infrastructure in the United Kingdom

and comparing that to Australia, ‘the country is paying way too much for its

infrastructure’.

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5. Discussion and Recommendations

5.1. Procurement

It is evident from the analysis undertaken of the data obtained in this study, that despite

the use of alliancing type approaches to procurement on larger scale projects, the industry

is transitioning away from this approach and that the traditional approaches of construct

only and design and construct are utilised in the delivery of most civil construction

projects.

It is evident from the study that there is no single or ‘one size fits all’ approach to

procurement and that the strategy is not only a reflection of the project characteristics, but

also the economic environment in which the industry is operating in at the time.

The study identified that the industry attributes a number of issues associated with the use

of price only approaches, despite participants in the study from contracting backgrounds

attesting that a good, honest contractor will always deliver the project with the same intent

regardless of whether a price only or non-price procurement strategy is used.

The major issues associated with the use of a price only approach tended to lean towards

cost and quality issues which led to transmitted impacts on relationships, disruptions to

the project, safety impacts, corners cutting and omissions and rework.

It was identified that in determining whether a non-price approach or a price approach

should be used, it is critical to consider the current economic environment, as a market

that has limited supply and excessive demand, as is the current contracting environment,

can lead to contractors ‘buying jobs’ and, in some instances, contractors submitting bids

to the market with negative margins with the intention that costs can be recovered through

variations.

It was clear in the study that private, local and state government agencies had, in the past,

used procurement strategies that had been price focussed but have since tended to

transition away from this approach due to unsatisfactory project outcomes and

performance from construction contractors. This was particularly evident in a local



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government context as the political environment in which they operate in, as well as the

constrained budgets, particularly in regional councils, creates the need for every dollar

spent to be significantly justified. Through the use of non-price criteria, this allows for

the decisions to not simply go with the lowest price to be somewhat justified, despite

issues related to subjectivity around the non-price criteria.

Clear consensus could not be drawn from the participants as to whether or not a non-price

approach would in fact deliver a better outcome for the project. It was generally perceived

that this approach allows for greater serviceability of the project, as the contractor is not

constrained as much by what is potentially an extremely low budget to undertake the

works, as is sometimes the case in price only approaches.

Participants did indicate though, that non-price approaches can inflate costs compared to

price only tenders, however the general consensus was that, in consideration of whole of

project costs, a non-price approach did not typically have a large impact on cost when

compared to a price only approach.

Of concern, is the fact that non-price approaches are still being made difficult by the

subjective nature of the assessment criteria. This indicates that little progress has been

made in trying to remove some of the subjectivity around these non-price elements and

that there is the need for studies to be undertaken, and outcomes sought to assist agencies

in reducing the subjectivity of these criteria. Despite this, it would appear from the study

that most agencies typically have well-structured policies and procedures around their

procurement processes.

It was found that the participants who were from private, local and state government

agencies who were involved in the procurement of contractors thought that it was a

relatively simple process due to the structured procedures and policies that are in place in

these organisations. Of concern though, was the influx of foreign workers employed by

procuring agencies that have a poor understanding of the procedures and policies due to

being unfamiliar with local and state government legislation. This indicates a lack of

training within these organisations and it is recommended that these agencies are made

aware of this short coming when considering the employment of foreign workers.



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In retrospect to the views expressed by procuring agencies, many consultants and

contractors explained that they found procurement a difficult process due to short time

frames to respond to tenders, poor quality documentation, a lack of understanding from

clients regarding the desired project outcome, and poorly scoped briefs.

In this light, it is recommended that procuring agencies should be made aware of these

shortfalls especially regarding the lack of project understanding and scoping that is

impacting on the ability of suppliers to accurately cost the required works, as well as the

fact that often, there is simply not enough time for the contractors to assess the

requirements and go into the detail required to provide an accurate cost. There is the

potential that these factors could be contributing to increased project costs that could

easily be removed with a little more attention and time given during the pre-tender phase.

This could somewhat be addressed in the type of procurement approach that is adopted

by the agency.

The research identified that the industry would like to see the continued use of both price

and non-price criteria used in tendering assessment and that they were in favour of the

use of pre-qualified supplier panels to ensure a minimum standard is maintained.

There was a clear preference from the industry to move towards the use of performance

driven specifications and to increase the use of design and construct approaches when

procuring contractors for projects. This approach was seen as the key to being able to

decrease the cost of civil construction projects, open the industry up and provide greater

freedom to contractors to be innovative and implement new technology and techniques

and most importantly, reduce the current issues associated with the production of poor

quality designs and documentation. On this basis, it is recommended that procuring

agencies be made aware of the call from the industry to move towards a design and

construct procurement approach.



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5.2. Performance Measurement

It is evident from the study undertaken that there has been significant development in the

area of performance measurement. This was identified in the research in that, while

traditional areas of time, cost and quality are still monitored, there are several further

areas that are now continually monitored on almost all construction projects.

Many of these areas have been identified in previous research as key areas to leading to

greater project performance and project outcomes. This indicates that the industry is

striving to increase the performance and project outcomes by increasing their scope of

performance measurement, and including these measures across civil construction

projects.

The study revealed that commonly, projects now also typically measure performance

related to traffic management, safety, community, relationships, environment and

communication. These are typical to the construction phase while in the pre-construction

phase, there is a focus on assessing contractor’s organisational structure, experience and

past performance.

The research revealed that the industry is of the opinion that these measures of

performance are reflective of the way the industry operates and that there are not

necessarily new areas of performance measurement that could be or should be introduced.

It was identified that, rather than investigate or introduce new measures of performance,

the industry should focus on perfecting the current measures of performance and investing

the time and resources to get this right.

It was found that the industry has come to accept that performance measurement is widely

used across the industry and has become embedded as part of the project delivery process.

It was found that there appears to be a difference in perception amongst the industry as to

the objectives of performance measurement and it is recommended that both procuring

agencies and contractors work closer together to try and achieve alignment across this

element of project delivery. This well help to improve the process as it will ensure that

all parties are on the same page.



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It was evident that there are issues related to the lack of training, resources and, from

smaller agencies, a lack of suitable support tools in the undertaking of performance

measurement. It was determined that often, little is done with performance data beyond

the extent of the current project and that greater utilisation of this data is required to ensure

that the process can continue to improve the performance of contractors and the outcomes

of future projects.

On this basis, it is recommended that organisations commit greater resources to the areas

of performance measurement and that training should be increased to ensure that the

people involved in the measurement of performance are aware of the objectives of

performance measurement, how it is to be undertaken and what to do with the data that is

gathered.

It is also recommended that organisations increase their focus on the data that is captured

and the transfer of the outcomes generated from this data across future projects and the

organisation as a whole. The data is of little use if it is siloed on a project by project basis.

This is particularly important as there was a resounding consensus that performance

measurement can have a positive impact on civil construction projects when it is

implemented well.

It was indicated that, although performance measurement will not typically change the

end product that is delivered, it is critical to the delivery of the project as it helps to align

the contractor and the client, provide a set of measurable goals for those involved in the

project, and provides direction and early warning of potential issues on a project.

To assist in this, and to strive for potentially greater results related to performance

measurement, it is recommended that further work be done around helping to define the

targets and to help reduce the subjectivity of some of the areas. It was indicated that some

agencies have attempted to do this through the development of matrices defining targets,

however further work should be done in this area as there was a consensus amongst the

participants that the greatest issue with performance measurement is the subjectivity.

It was clear from the study participants that they did not feel that current approaches to

procurement prohibit the ability of a contractor’s performance to be monitored, and that



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the strategy more so provides general guidance and overarching areas that are to be

monitored while allowing the freedom to adopt project specific measurement areas. From

this perspective, it is evident that changes are not required to the procurement approaches

regarding the ability to allow for performance measurement.

5.3. Innovation

In consideration of all findings from this study, of the most importance are those related

to the potential to drive innovation through the industry via performance measurement

and the issues that this has uncovered.

It was found that the industry does not believe innovation can be driven through

performance measurement, as measurement is typically done during the project delivery

phase and that, at this point of the project, the opportunity to innovate, make changes and

provide potential cost savings for a project is very limited. The ability to make changes

at this point of a project is also exacerbated by risk averse governments who are

particularly unreceptive to any proposed changes that may deviate outside the

specifications and standards.

The study identified that the industry is being stifled by client’s who are handcuffing

consultants and contractors through the use of overly prescriptive specifications and the

application of standards as if they are cast in stone as opposed to using these as guides.

The industry feels that there is great opportunity being lost on all projects that are being

delivered in regards to innovation and the benefits that contractors can bring to a project,

especially in Queensland.

It was discovered that Queensland’s approach to innovation is particularly bad and in

some instances, the worst that some study participants had seen. It was found that

innovation is often talked about but rarely driven at the project level and that the ‘red

tape’ associated with pursuing innovation, even if it can bring significant benefit to a

project, makes it overly complicated, time consuming and often prevents the pursuit of

innovation all together.



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It was found that, rather than try and drive innovation through performance measurement,

this should be done through the procurement strategy. This comes back to earlier

discussion in that the industry would like to see a trend towards design and construct

procurement approaches.

The industry feels that by adopting this approach to a greater extent on projects, it will

allow innovation to be brought back into the industry, as the contractor can be involved

before many of the design decisions are made, signed off and given no further thought.

In addition to this, there needs to be monetary benefits associated to the pursuit of

innovation as this will further drive consultant’s and contractor’s to pursue innovation.

This could lead to significant cost savings across projects for all parties involved.

It was identified that infrastructure costs on current civil construction projects are

believed to be excessive by study participants and that this could be reduced through the

methods mentioned above. It is clear that the industry is calling for change in this regard

and that the findings of this study in relation to prescriptive specifications and standards,

and the current approach to innovation from risk averse governments needs to be taken

further.

It is evident that the current environment allows for little engineering input, particularly

when it comes to pursuing alternatives outside the norm, and that it has become more of

a step by step process, following standards and guidelines, and simply preparing the

documentation.

75

6. Conclusions and Further Work

6.1. Conclusion

This research project was undertaken to assess current industry thinking in regards to

procurement strategies and performance measurement for civil construction projects, and

to assess the relevance of performance measurement to the current industry, whether new

areas of performance measurement could be introduced, and to ascertain whether

performance measurement could be used to drive innovation through the civil

construction industry.

Through the use of the Delphi technique, a panel of industry experts were assembled from

which a single round study, using a feed forward methodology was used to extract the

opinion and judgements of these experts using semi-structured interviews. This process

resulted in a large amount of qualitative data that was assessed using the Framework

Approach.

While this study has identified a number of key findings in regards to the areas of

procurement and performance measurement, and provided a number of

recommendations, it is necessary to acknowledge the limitations associated with this

study and the impact this may have on the findings.

It is accepted that, despite the best intentions of the researcher, the research findings are

based on the outcomes of the Delphi study and that this approach does not yield

statistically significant results. This approach provides findings based on the opinions of

select industry experts who may not necessarily represent the opinions of the industry as

a whole. Despite this, it should be acknowledged that this research technique is used

widely around the globe in many studies and that by engaging with industry experts, it is

assumed that these experts have an excellent understanding of the subject matter and can

provide quality information in regards to the research areas.

Limitations primarily related to time, and the willingness of industry experts to participate

in this study resulted in the panel being limited to a size of 20 participants. This was seen

as suitable given the aims of the project although it is acknowledged that a larger panel



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could change the results. Nonetheless, Delphi studies have been performed several times

with panel sizes smaller than this.

The project set out with the aim to investigate performance measures for civil construction

projects associated with procurement strategies used in the current civil construction

industry.

With this in mind, the study focus was on a number of key objectives. These are listed

below with comments made regarding their outcomes:

Objective 1 Research current procurement strategies used in the procurement of

contractors for civil construction projects.

This was achieved through undertaking a literature review, which identified that the

industry currently uses a number of procurement strategies for civil construction projects.

This is covered in Chapter 2, but briefly, the literature identified that the most typical of

these are the construct only, and the design and construct approach. This was also

confirmed in the Delphi study in which the participants nominated these two approaches

as most common.

Objective 2 Research performance measures used in the various procurement

strategies to assess contractor performance;

This was achieved through undertaking a literature review which identified that there are

a number of performance measures utilised on civil construction projects. This is covered

in Chapter 2, but briefly, the literature identified that performance measures used in

procurement strategies include the traditional areas of time, cost and quality but has

moved on to include several other areas of measurement in the hope of achieving greater

performance and project outcomes. This was also confirmed in the Delphi study in which

participants nominated the traditional areas of time, cost and quality but also several other

areas that included traffic management, safety, community, environment,

communication, and relationship management.



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Objective 3 Ascertain the relevance of these procurement strategies and performance

measures to current industry;

This was achieved through undertaking the Delphi study in which it was found that the

common approaches to procurement are relevant to the way the industry currently

operates and that the general consensus is that procurement is typically done well due to

structured policies and processes within the procuring organisations.

There were difficulties experienced in procurement for consultants and contractors due to

time, scope and client issues with this covered in greater detail in Chapters 4 and 5.

It was found that the industry thought current performance measures are relevant to the

way the industry operates and that this has become embedded as part of project delivery.

The key recommendations to come out of this objective is that the procuring agencies

need to increase training of staff, especially those who have come to Australia from other

countries, to ensure that employees understand procurement processes and implement

them correctly.

Objective 4 Gauge an understanding of current industry thinking on procurement and

performance measures;

This was achieved through undertaking the Delphi study in which it was found that the

industry is open to performance measurement and that it has become embedded as part

of project delivery. It was determined that the industry feels that performance

measurement has a positive impact on project performance and the outcome of the

project. This is covered in greater detail in Chapters 4 and 5.

The key recommendations to come out of this objective is that the industry should

continue with performance measurement and that investment into this area can yield

significant benefits for all parties involved in the delivery of the project.



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78

Objective 5 Evaluate the level of importance and value placed on performance

measures and the relativity of these levels to ultimate project outcome;

This was achieved in undertaking the Delphi study in which it was found that there were

differing values placed on performance measurement. From the perspective of the

procuring agencies, it was typically seen as a tool to help ensure that consultants and

contractors are meeting the minimum performance requirements, while consultants and

contractors saw it as a way of achieving a competitive advantage over other contractors

if they were ranked highly regarding performance.

Despite this, the industry expressed that performance measurement is a valuable tool in

the delivery of projects as it helps to align all parties involved, provides measurable goals

and targets for the project, and helps to identify issues and mitigate these before they

become serious. The findings in relation to this task are covered in greater detail in

Chapters 4 and 5.

Objective 6 Identification of potential new performance measures, particularly those

related to innovation; and

Objective 7 Ascertain if performance measurement can be used to drive innovation

through the civil construction industry.

This was achieved in undertaking the Delphi study in which it was found that the industry

did not feel there were new areas of performance measurement that should be introduced

but that the industry should work on perfecting the measurement of the current areas.

It was identified that the industry did not feel that performance measurement could be

used to encourage innovation but that this should be done through the use of procurement

strategies that allow the freedom to innovate. It was found that the preferred industry

approach to procurement is the design and construct approach as this allows for greater

involvement of the contractor at earlier stages of the project. This is covered in greater

detail in Chapters 4 and 5.

The key recommendations to come out of this objective is that the industry should focus

on the current measurement areas and that there should be increased training in regards



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79

to undertaking performance measurement and the utilisation of this data. There should

also be increased investment into performance measurement systems and greater

resourcing dedicated to these areas of project delivery.

In achieving these project objectives, the study successfully answered the following

research questions:

Are performance measures used in civil construction projects reflective of

current industry practices?

Do current procurement strategies and thinking provide sufficient scope to

adopt the necessary performance measures?

Is sufficient value placed on performance measures and the results of these

measures?

What is current industry thinking on procurement and performance

measurement?

Is there potential for the development of new performance measures that are

reflective of current industry practice?

Could innovation can be driven through the industry via performance

measurement?

6.2. Further Work

It is felt that the findings of this study, particularly those related to innovation and the

industry being stifled through prescriptive specifications and standards, as well as the call

from the industry to utilise design and construct approaches to a greater extent should not

be ignored. There should be further research undertaken to solidify these findings as set

out below, and this used to initiate change in the industry:

Undertake further industry research in the areas investigated in this study

involving participants from the construction industry throughout Australia to

determine if the same relationships and trends are identified;

Undertake research into the design and construct procurement approach to

determine if there is a tendency for this approach to drive innovation;



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80

Undertake research into the use of performance driven specifications and the

potential impact that these have on project outcomes; and

Present the findings of this study to Local and State Government agencies

highlighting current issues regarding innovation in the industry;

81

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Appendices

Appendix A Project Specification


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University of Southern Queensland


ENG4111/4112 Research Project

PROJECT SPECIFICATION

FOR: LUKE SEENEY

TOPIC: PROJECT PERFORMANCE MEASURES FOR CIVIL

CONSTRUCTION PROJECTS ASSOCIATED WITH DIFFERENT

PROCUREMENT STRATEGIES

SUPERVISOR: Mr Paul Tilley

PROJECT AIM: This research project seeks to investigate performance measures for civil

construction projects associated with different procurement strategies.

The key objectives are to investigate current performance measures and

the relevance of these to current industry, gauge an understanding of

current industry thinking on performance measures, evaluate the value

placed on performance measures, and identify new performance

measures reflective of current industry practices and improvements in

technology.

PROGRAMME: Revision 2, 19 October 2015

1. Research current procurement strategies used in the procurement of contractors for civil construction projects;

2. Research performance measures used in various procurement strategies to assess contractor performance;

3. Liaise with industry members regarding procurement strategies through interviews, to gain an understanding of industry perspectives on performance measures;

4. Evaluate the level of importance and value placed on various performance measures and their relativity to ultimate project outcomes;

5. Investigate opportunities to introduce new performance measures reflective of current industry practices and technology, to improve the validity and measurement of performance;

6. Ascertain if performance measurement can be used to drive innovation through the civil construction industry; and

7. Submit an academic dissertation on the research.



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Appendix B Interview Questions



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Name Date

Organisation

Location

Time Start Time End

INTERVIEWEE BACKGROUND INFORMATION (BI)

BI–1 What is your current role within your organisation?

BI–2 How long have you been involved in the construction industry?

BI–3 Throughout this time, what has been your typical role?

BI–4 Have you primarily been involved in public or private industry?

PROCUREMENT (P)

P-1 Have you been involved in the development of procurement strategies?

P-2 If so, what do you find are the most commonly developed procurement strategies?

P-3 Do you think that these strategies provide sufficient scope in relation to performance

measurement?

P-4 In what way do you think the project outcome differs if a procurement strategy is price

based as opposed to value or non-price based strategies?

P-5 By adopting a price based procurement strategy, what areas of a project does this detract

from, if any?

P-6 Do you think a non-price approach delivers a greater project outcome when compared

to a price-based approach, why or why not?

P-7 Do you think a non-price approach increases or creates additional project costs, why or

why not?

P-8 Which procurement approach do you think the industry should try and move towards in

an attempt to achieve greater project outcomes and why?

P-9 Do you find that procurement is a difficult, vague and ambiguous process, why or why

not?



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PERFORMANCE MEASURES (PM)

PM-1 How have you been involved in performance measurement for civil construction

projects?

PM-2 What measures do you find are typically adopted in performance measurement?

PM-3 Do common procurement strategies allow the adoption of sufficient performance

measures and are they utilised in projects?

PM-4 Are typically adopted performance measures reflective of current practices in the civil

construction industry, why or why not?

PM-5 How is performance measurement in the construction industry perceived?

PM-6 If a project has an emphasis on performance measurement and is implemented well,

how do you believe this affects the project outcome?

PM-7 Is performance measurement an arduous element in project delivery, why or why not?

PM-8 Do you think new areas of performance measurement aside from those typically used

could be introduced that better reflect current practice in the civil construction industry?

PM-9 What areas or if not, why do you think it is not necessary?

PM-10 Do you think that current performance measurement adopted under procurement

strategies encourages Contractors to be innovative at the benefit of the Client?

PM-11 If not, what types of performance measurement could be introduced to encourage

this?

PM-12 Have you found that the construction industry is typically slow to change, develop

and adopt new process or techniques that could improve performance?

Are you aware of the KPI’s developed for the Australian Construction Industry by the

Australian Construction Industry Forum and the Australian Procurement and Construction

Council?



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Appendix C Interview Transcripts





1.1

1.3

1.4 and 1.5

PROCUREMENT (P)


P-2 If so, what do you find are the most commonly used procurement strategies?

What is your typical annual works program budget?

2.2

2.1

2.2

2.1

P-3 Do you think that these strategies provide sufficient scope in relation to performance measurement?

P-4 Do you think price based procurement strategies deliver poor quality outcomes when compared to value based, or non-price based procurement?

P-5 Do you think price based procurement creates too much focus on the price element of the project at the detriment of others measures such as quality?

P-6 Do you think a non-price approach delivers a better project outcome when compared to a price-based approach?

2.3

2.4

2.6

2.5

P-7 Do you think a non-price approach increases or creates additional project costs, why or why not?

P-8 Which procurement approach do you think the industry should try and move towards in an attempt to achieve greater project outcomes and why?

P-9 Do you find that procurement is a difficult, vague and ambiguous process?


PM-1 How have you been involved in performance measurement for civil construction projects?

2.7

3.1

2.8

2.9

2.5


••••

PM-3 Do common procurement strategies allow the adoption of sufficient performance measures?

PM-4 Are typically adopted performance measures reflective of current practices in the civil construction industry, why or why not?

3.2

2.3

3.3


PM-6 If a project has an emphasis on performance measurement and is implemented well, how do you believe this affects the project outcome?

PM-7 Is performance measurement an arduous element in project delivery?

PM-8 Do you think new areas of performance measurement aside from those typically used could be introduced that better reflect current practice in the civil construction industry?

3.4

3.5

3.4

3.6


PM-10 Do you think that current performance measurement adopted under procurement strategies encourages Contractors to be innovative at the benefit of the Client?

PM-11 If not, what types of performance measurement could be introduced to encourage this?

PM-12 Have you found that the construction industry is typically slow to change, develop and adopt new process or techniques that could improve performance?

Are you aware of the KPI’s developed for the Australian Construction Industry by the Australian Construction Industry Forum and the Australian Procurement and Construction Council?

3.6

3.7

3.7

3.4





1.1

1.3

1.4 and 1.5

PROCUREMENT (P)




P-4 In what way do you think the project outcome differs if a procurement strategy is price based as opposed to value or non-price based strategies?

2.1

2.3

2.4

2.2

P-5 By adopting a price based procurement strategy, what areas of a project does this detract from, if any?

P-6 Do you think a non-price approach delivers a greater project outcome when compared to a price-based approach, why or why not?



P-9 Do you find that procurement is a difficult, vague and ambiguous process, why or why not?



2.6

2.5

2.7

3.1

2.9

2.8


PM-3 Do common procurement strategies allow the adoption of sufficient performance measures and are they utilised in projects?




3.2

2.3

3.3

3.4

3.5




PM-10 Do you think that current performance measurement encourages Contractors to be innovative at the benefit of the Client?


3.4

3.6

3.7

3.7

3.6


What is the typical value range of projects undertaken by MCE?


3.4





1.1

1.3

1.4 and 1.5






2.1

2.3

2.4

2.6

2.2





2.7

2.5

2.8

2.9






3.1

3.2

2.4

3.3

3.4






3.5

3.6

3.4

3.6

3.7




3.7

3.4





1.1

1.3

1.4 and 1.5

PROCUREMENT (P)






2.1

2.3

2.4

2.6

2.2





very

2.7

2.5

2.8

2.9








3.1

3.2

2.3

3.3

3.4

3.5





3.4

3.6

3.6

3.7


PM-12 Have you found that the construction industry is typically slow to change, develop and adopt new processes or techniques that could improve performance?


3.7

3.4





1.1

1.3

1.4 and 1.5




2.1

2.3

2.2




2.4

2.6

2.5





2.7

2.5

3.1

2.9

2.8






3.2

2.3

3.3

3.4

3.5






3.4

3.6

3.6

3.7

3.7



3.4





1.1

1.3

1.4 and 1.5







2.1

2.3

2.4

2.6

2.5

2.2






2.7

3.1

3.2

2.8

2.9






2.3

3.3

3.4

3.5

3.4






3.6

3.6

3.7

3.7


3.4





1.1

1.3

1.4 and 1.5


Luke Seeney

2

PROCUREMENT (P)


Yes I have been involved in the development of purchasing policies and procurement strategies although this is heavily dictated by the Local Government Act. Always need to maintain transparency due to being a local council and the fact that all dollars are so heavily scrutinised. One simple example of this was the purchasing of a numbers of rollers in which we didn’t go to the cheapest supplier due to other benefits but a senant enquiry was launched and I had to answer and justify the purchasing decision that was made. We generally try and meet our needs through in-house supply with a nucleus of resources that are supplemented by external supply on an as needs basis.


Typically design and then construct. Our tendering process is dictated by price and the Local Government Act. Up to a value of $5000 we can just engage someone to do the work. For values of $5001 - $15,000 we are required to obtain two quotes, for values of $15,001 - $200k we need to obtain three quotes and for values in excess of this we need to advertise and go to marker, do full tender assessment and obtain council approval. We have a panel of suppliers that we go out to and we go to those who have done good work for us in the past and can be relied upon. More and more it seems as though Contractor’s would prefer to go design and construct but this is typically not the best approach for us as our project are typically of a small nature. We’ve tried it in the past and been burnt by poor Contractor performance. It’s a good concept but, like all strategies, has its place. P-3 Do you think that these strategies provide sufficient scope in relation to performance measurement? Yes, the procurement strategy does not typically prohibit performance measurement. Our policies typically do not contain specifics about performance measurement. For us it comes down to resourcing and the fact that we only use basic documentation on our projects. This is a contentious issue within our council due to size and limited resources available to support this kind of thing. For us it comes down to individual Officers previous experience with Contractors. If we’ve had response issues or delivery problems in the past we won’t typically engage the Contractor again if possible. However we don’t document this which makes it difficult to justify decision making. We should be trying to but again it comes back to resourcing and lack of appropriate systems.

2.1

2.3

2.2


Luke Seeney

3


In the past, being a smaller council, we have had a focus on price but there has been incidences where this has ended disastrously for us. There was one project in particular where we engaged a Contractor to construct a new bridge who was selected on the basis of cheapest price. There was significant issues with delivery of the project due to capability and experience and it ended up costing twice as much as what was expected in contract management costs to manage the Contractor and get the project completed. You typically get what you pay for and we now put in criteria to allow assessment against price, experience, and capability.


It does not necessarily always detract from areas of a project but if it does it is typically related to the quality of the delivered asset, can impact on the timing and delivery of the project and ultimately whether the project is as fit for purpose as it could be.


Yes absolutely but that doesn’t mean that a cheap Contractor can’t do a good job. Sometimes you get lucky and a Contractor will rate well against things such as experience, capability and also be the cheapest.


Not typically, in consideration of whole of project costs you can basically end up in the same place from a cost perspective. If you’ve got good relationships with your Contractors you make sure that they are making some money, we are getting what we want and that things are still coming in at a good value.


I think that TMR’s approach to having a panel of pre-qualified Contractors works really well and helps to push Contractors to maintain minimum levels and keeps the cowboys out. But again this comes back to having the right systems and available resources to effectively utilise these processes. There’s not really one particular approach but value based procurement seems to deliver effective results and works for all parties.

2.4

2.6

2.7

2.5

2.8


Luke Seeney

4

P-9 Do you find that procurement is a difficult, vague and ambiguous process, why or why not? No not from our perspective. It is pretty clear cut due to our policies and procedures (local government act). There is a lot of bureaucracy being government but that is the nature of the environment that we operate in. This can make it difficult but just need to ensure transparency and justification of decision making. There is also internal and external auditing that is carried out to ensure that things are being done correctly and clear up any potential issues.



Through the measurement of quality against specifications, supervision of the contract on a day to day basis for quality and conformance as well as the preparation of performance reports as well as things such as site instructions to correct conformance issues etc.


Conformance against the specifications, quality, time and safety. There is some measurement of environment but not a lot due to our projects typically being low risk in regards to potential environmental impact.


Yes they do and we typically write in performance measures on a project by project basis as our strategies do not really cover this. The larger the project, the more emphasis that is placed on this due to higher risks which council cannot afford.


Yes but it can be difficult to get Contractor’s on board regarding performance measurement especially on the smaller projects. It’s hard to get them focussed on risk management particularly around public safety through construction sites.


Seems to be difficult to justify the need to Contractors as it tends to come back to price and they see it as an extra cost to the project that they don’t want to carry especially on the smaller projects. This is understandable especially considering some jobs they just want to get in and out with minimal fuss.

3.1

3.2

2.9

2.3

3.3

3.4


Luke Seeney

5

PM-6 If a project has an emphasis on performance measurement and is implemented well, how do you believe this affects the project outcome? It improves the project outcome as it provides a measureable against areas which, if done well can deliver a greater outcome. By undertaking performance measurement in these regards it gives the Contractor something to aim for and also creates the need for the Contractor to pay more attention to the measured areas. Focus brings attention, which brings detail which can yield a better outcome.


Not particularly and is covered as part of the contract administration. The difficult side of it is that it creates conflict if poor performance is being observed and addressed. There’s always a million reasons, or excuses, as to why something may not be going as well as it could be and this also makes it difficult to measure.


Yes but as to which areas it’s difficult to determine. The other consideration is the cost of such measures and whether they yield a substantial benefit to make it worthwhile. The other issue is these measures can be manipulated i.e. a Contractor can nominate a team for a project but at the end of the day, are those guys actually going to be dedicated to your project it will it be the graduate do most of the work with marginal input from the nominated team member. You think you’re getting one thing and end up with another.


See PM-8.


No, not necessarily. The problem with the construction industry is that there are tried and true techniques that deliver all the time. For a council like us, it is difficult to justify trialling new techniques due to the cost risks associated with this and the fact that we have limited budgets and these must be justified. Prefer to allow someone else to trial it before looking into it. Everyone seems to talk about innovation but innovative pursuits are rarely undertaken. Comes back to risk.

3.5

3.4

3.6

3.6

3.7


Luke Seeney

6


It would be good to just see innovation in general but again it comes back to risk. We’ve looked into things in the past regarding replacement of our old wooden bridges with fibre composite bridges but then this opened up a whole new issue of who had experience with these, who could deliver. Same thing with foamed bitumen pavements, reasonably innovative but not often used and issues associated with cost compared to more traditional pavements. PM-12 Have you found that the construction industry is typically slow to change, develop and adopt new process or techniques that could improve performance? Yes absolutely. But it is different for everyone. I’ve found with our organisation it is extremely difficult to change the culture. Things have been done the same way forever and people don’t want to change. Some people are prepared to innovate but at the same time I’ve been hammered when trying to bring in new ideas. It’s a human comfort thing and you often receive pushback. People are also jealous and people don’t want to be shown up by the ideas of others. Australian Construction Industry Forum and the Australian Procurement and Construction Council? No I have not heard of these. This is a lack of connection from these kind of organisations with local governments. Local governments tend to operate in a bit of a bubble in that, if you’re a local supplier, within a reasonable range regarding price, you’ll tend to get the job.

3.7

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Luke Seeney

1

Name IP17 Date 06.10.2015

Organisation Multi National Design Consultancy

Location Interviewee’s Offices

Time Start 5.00pm Time End 5.45pm

INTERVIEWEE BACKGROUND INFORMATION (BI)


I am currently a Project Manager/Senior Engineer delivering civil and structural infrastructure projects.


10 years of industry experience.


I started as a graduate engineer as a Structural Engineer with a private company where I spent approximately 4 years before moving into the role of a Civil Engineer which has transitioned into a Senior Engineering role where I primarily manage the delivery of our civil and structural projects.


All of my experience has been in the private sector.

1.3

1.1

1.3

1.4 and 1.5


Luke Seeney

2

PROCUREMENT (P)


No I have not been involved in the development of procurement strategies but I am often involved in procurement from a tendering perspective. Aside from project management, I prepare a large amount of the tender submissions for both civil and structural projects so I am very familiar with procurement procedures and policies through this.


I find that the majority of works are still procured under a design and then construct arrangement. Sometimes you will see the odd design and construct project but these are not all that common from what I have seen. On very large projects you will sometimes see alliance type arrangements in place but this doesn’t seem to happen much anymore will traditional design and then construct still making up the majority of strategies.


I think so. The strategy doesn’t really determine what will be measured in regards to performance, it more so sets up the environment for which performance measurement can then be conducted. i.e. the measures on a design and then construct project could be different to those on a design and construct project.


It's difficult to say especially given that price strategies can be influenced by so many factors i.e. in the current environment just because you get a cheap price doesn’t necessarily mean anything of detriment, it could simply be a reflection of the current economic situation where there isn’t a lot of work.


The areas that a price strategy can detract from are primarily your areas of personnel in that the most skilled and respected and expensive people will not be dedicated to the project which could have a flow on effect to the quality of the asset that is delivered. It can also effect relationships as on price only strategies the dollars could be tight and any little thing that doesn’t go to plan (as is often the case) will mean dollars and when there aren’t dollars there in the first place, it can create tense relationships as variations are sought and every dollar is scrutinised.

It also creates time issues especially in the design phases whereby the amount of time that is allocated to tasks may not be enough. This is done to keep the costs down but can create design

2.1

2.2

2.3

2.4

2.6


Luke Seeney

3

and documentation issues as everyone is under the pump to get things done quicker which can lead to oversights, omissions and ultimately quality issues.


Potentially yes as the outcome can be a combination of things such as the relationships that are formed during delivery. At the end of the day, it may not change the asset that is ultimately delivered but it can impact on things such as the way traffic is managed, the way community relations are handled, the impacts on the environment during delivery. For instance, if the contractor is tight on dollars regarding that budget allocation for environmental protection, he may just go with the bare minimum to achieve compliance whereas a contractor who isn’t tight on dollars may provide what would be expected as opposed to just the bare minimum.

As mentioned in the previous questions, I think the biggest impact area is around relationships whereby with a non-price approach there won’t be as big a push for every variation and the contractor will be more likely to work with you and ‘give a bit’ so to speak.

Contrary to the previous question it can have the opposite impact on time in that more time can be allocated to correctly suit the tasks at hand and therefore a greater level of detail and focus can be given to achieving the right result.


In terms of the entire project I don’t think it does. A project will always have an expected dollar figure or estimate and I think both approaches would typically end up being somewhere around that figure regardless of a price or non-price approach. The difference would be how you get to that figure i.e. price only might be low initially but you get towards this figure through variations, a non-price approach might be closer to this budget figure to start with and still have some variations which move the ultimate dollar amount back towards that initial figure.


It depends on the project but I think the use of either a design and then construct, or a design and construct approach works well.

On projects that are relatively simple, have low risk, few complexities and are just your everyday run of the mill projects, I see no issues with using a design and then construct approach. On these projects there’s really no need for a contractor to be involved early on in the process and can easily be handled by your typical design consultancies.

On more complex projects though which may include greater risk and require the use of specialist techniques or skills, I think the design and construct approach is the way to go as this allows for the contractor to be involved early on in the project lifecycle and provide input during the critical phases of design. If a construct only approach was

2.5

2.7

2.8


Luke Seeney

4

taken with this type of project, it opens up the client to greater risks and prohibits the ability of the contractor to identify, what could be, more efficient and effective construction solutions.


Not really, it’s always pretty clear cut but what makes it difficult is short response times and sometimes a lack of clarity or definition around what the client wants. I often find that we submit tenders where you just don’t have the time to give it as much attention and perfection as you would like.



I have been involved from the perspective of being measured and the perspective of measuring our in-house performance. This has included preparation of reports regarding performance, participating in performance meetings.


These days most projects cover off on the same elements which include time, cost, quality and also things such as environment, traffic management, safety, community measures. There also seems to be a bit more emphasis on relationships these days.


Yes they do, and just about all project utilise performance measurement in some regards on project today.


Yes I think so. All the major elements of a project are typically covered under typically adopted performance measures. I’m not sure what other areas could be measured. It’s important that it doesn’t drill down too far but at the same time still keeps track of the major elements as this assists in making sure these targets are hit.


Performance measurement is relatively common place these days and I think people have just accepted that on every project your performance will be somehow measured and monitored. I

2.9

3.1

3.2

2.3

3.3

3.4


Luke Seeney

5

don’t really see an issue with it or why there would be as if you are performing well, there shouldn’t be any issues.


It may not necessarily change the ultimate outcome that is delivered as at some point you need to provide what you are being paid for but what it does effect is how you get to that outcome. By having measures on performance and monitoring this well, it should help delivery of the project, make for smoother delivery with less issues and assist both the contract and the client in getting to the finish line.


No I don’t think so. On most of the projects that we do, our clients are of a larger size and typically have the systems and procedures in place to undertake performance measurement. Some of the smaller councils don’t tend to have the same level of systems or emphasis on performance measurement, but this could be a reflection of the size of the projects that these organisations do which are typically of a small nature.


No not necessarily. I think many of the major areas are already covered off and reflect the way the industry goes about business. It’s important that performance measurement continue in industry and that the way this is done, implement and utilised continues to develop with the industry.


Refer to PM-8.


No not really. Innovation is a difficult one as no one really wants to be the ‘first guy’ to try something out as it can potentially cost large amounts of dollars and may go wrong.

Difficulty also arises in that new techniques or processes etc. have to go through a large amount of red tape before they can be trialled as they may not necessarily align with current requirements. This then creates time issues on projects that simply can’t absorb this kind of red tape.

3.4

3.4

3.6

3.6

3.7


Luke Seeney

6


There could potentially be a measure placed on what new technologies, or processes were brought to the table by the contractor during delivery but again, during construction there is little time or opportunity to be trialling this.

I think a better approach is for the agencies to drive this and to do it through their approaches to procurement. This relates back to the previous questions regarding a design and construct approach. This approach allows the contractor to become involved at an early stage, have input into how things could be done better, or more efficiently, or using alternate products. This is where the innovation could be bred. It’s important to that incentives be tied to this as there are potential costs associated for the contractor in pursuing these innovations and he should be compensated accordingly if dollars can be saved by the client.


It can be, especially in regards to some of the old construction methodologies etc but normally if a new piece of technology or technique comes out that is proven, it will often be picked up rapidly by the industry.


No I am not aware that these have been developed.

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3.4





1.1

1.3

1.4 and 1.5

1.3






2.1

2.2

2.3

2.4

2.6






2.5

2.7

2.8

2.9

3.1







2.3

3.3

3.4

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3.4







3.6

3.6

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3.4





1.1

1.3

1.4 and 1.5

1.3






2.1

2.2

2.3

2.4

2.6





2.5

2.7

2.8

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3.3

3.4

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3.4

3.6

3.6

3.7

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3.4





1.1

1.3

1.4 and 1.5

1.3







2.1

2.2

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2.6

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2.7

2.8

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2.3

3.3

3.4

3.1

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3.4

3.6

3.6

3.7

3.7

3.4




Luke Seeney

210

Appendix D Participant Profiles



Luke Seeney

211

ID Organisation Current

Position

Years of

Experience Qualifications

IP01

Private Company

Works Authority

Project Manager and

Principal’s

Representative

17 years

private

industry

Bachelor or Architectural

Design

IP02

Tier 2 Contractor Manager of Business

Development and

Relations

15 years

private

industry

Bach. of Engineering (Civil),

CPEng, RPEQ

IP03

Multi National

Consultancy

Senior Contracts

Manager

4.5 years

public, 9

years private

industry


CPEng. RPEQ

IP04

State Government

Agency

Team Leader

Pre-Construction

1.5 years

private, 25.5

years public

industry


CPEng. RPEQ

IP05

City Council

Agency

Contracts Manager

Capital Efficiency

Expenditure Program

5 years

private, 9

years public

industry

Masters of Infrastructure

Engineering and Management

IP06

State Government

Agency

Principal Project

Officer

1 year

private, 29

years public

industry

Associate Degree Civil

Engineering

IP07

Regional Council

Agency

Director Infrastructure

Services

31 years

public

industry


Masters of Business

Administration

RPEQ, Emeritus IPWEAQ

Member

IP08

Multi National

Consultancy

Qld Transportation

Team Leader

20 years

public, 10

years private

industry

Bach. of Eng. Tech. (Civil)

IP09

Tier 2 Construction

Contractor

Engineering Manager,

Northern Region

1.5 years

public, 33.5

years private

industry


IP10

Regional Council

Agency

Coordinator

Infrastructure Planning

and Design

7 years

private, 8

years public

industry


IP11

City Council

Agency

Civil Engineering

Officer

14 years

private, 33

years public

industry

No formal qualification

IP12

Multi National

Consultancy

Operations Manager 12 years

public, 11

years private

industry

Associate Degree Civil

Engineering

IP13

Tier 3 Contractor Managing Director 24 years

private

industry

Trade – Carpenter with an

open builders licence

IP14

Local

Environmental and

Planning

Consultancy

Director 7 years

public, 13

years private

industry

Masters in Urban Planning

Bach. of Science

(Environmental)



Luke Seeney

212

IP15

Local Design

Consultancy

Director 16 years

public, 17

years private

industry


IP16

Tier 2 Contractor Project Manager 12 years

private

industry


IP17 TBC TBC

IP18

Multi National

Private Works

Agency

Contract

Administrator/Project

Manager

5 years

public, 16

years private

industry

Diploma Project Management,

Clerk of Works, Open

Builders Licence

IP19

Tier 2 Contractor Project Manager /

Engineer

1.5 years

private, 8.5

years public

industry


IP20

Tier 1 Contractor Project Manager 13.5 years

private

industry




Luke Seeney

213

Appendix E Procurement Experience



Luke Seeney

214

ID Participant Procurement Experience

IP01

Typically used off the shelf approach to procurement predominately two stage design and

construct, construction management format, and traditional lump sum. Have been involved in

the development of strategies - every project that the organisation undertakes, the team

establishes which procurement approach best suits the project and develops an appropriate

strategy. Our organisation also has a spreadsheet that can be used if there is uncertainty around

the strategy which, through a number of in depth questions, can help to establish which

approach could be best suited for a specific project. The spreadsheet primarily focusses on risk

and who is best placed to take on this risk, i.e. a program risk should be offloaded to the

Contractor as the Contractor is driving the program.

IP02

For current company have developed procurement policies and procedures that form part of the

management system. Sit on both sides i.e. we tender and try and get procured for works but at

the same time we procure a number of Sub-contractors to assist in the delivery of works that

we win.

IP03

Not overly, generally the procurement strategy has been selected for a project before my

involvement begins. However I am familiar with a large array of procurement strategies and

contracts being a Senior Contracts Manager. This includes straight road construction contracts

through to early contractor involvement and alliance arrangements.

IP04 Not so much in the development of these strategies, but largely in the implementation of these

strategies and providing input to the procurement team about strategies.

IP05

Yes from all aspects such as pre-construction, tendering and award as well as post award.

There is always great intentions at the start of the procurement development process but it

typically ends in a rush and hastiness due to time constraints or a lack of focus on areas where

it should have been.

IP06 Not so much in the development but more so the application of these strategies during the

preconstruction phases as well as the post award phase.

IP07

Yes I have been involved in the development of purchasing policies and procurement strategies

although this is heavily dictated by the Local Government Act. Always need to maintain

transparency due to being a local council and the fact that all dollars are so heavily scrutinised.

One simple example of this was the purchasing of a numbers of rollers in which we didn’t go

to the cheapest supplier due to other benefits but a senant enquiry was launched and I had to

answer and justify the purchasing decision that was made. We generally try and meet our needs

through in-house supply with a nucleus of resources that are supplemented by external supply

on an as needs basis.

IP08

Involved more so with business strategies and Client strategies but not so much in the

development of procurement strategies. Have been involved from the side of responding to

strategies. Heavily involved in the tender stages of projects for MWH and actually responding

to the chosen procurement strategy. This includes everything from EOI’s to sole invitees,

RFT’s and all the difference variances. Have been involved in some D & C projects as well. As

a private consultant we are responsive to the procurement strategy chosen by the agency

procuring the works.

IP09

During the stint with the local council in the UK I was trying to change the way we procured

Contractors and the contracts we used to be more fair to all parties and obtain better pricing.

I’ve also been involved in representing Contractors by providing inputs to agencies as to what

types of strategies would be best suited to a particular type of project. Ultimately that decision

is not the Contractors but I have provided advice on this in the past. There is such a large range

of models now that it’s difficult to know which one to use and some are better suited than

others depending on project circumstances.

IP10

Not really because with local government you already have legislation such as the local

government act which dictates your strategy and approaches. However I was involved in the

working group for procurement policies and procedures which were formulated out of the

regulations and legislation.

IP11 No not really. Generally each organisation already has the system in place which you need to

follow when procuring goods and services.

IP12

Yes I have been. I’ve been involved in the procurement of engineering consultants for projects

and also currently involved in the procurement of resources, contractors and sub-consultants.

Being the Operations Manager I also procure services to assist in the day to day running of the

business.



Luke Seeney

215

IP13 Yes, particularly with this company where I have directly been involved in the development of

our procurement strategies and purchasing policies.

IP14 Yes, I have been involved in the development of procurement approaches for our consultancy as

well as the implementation of strategies from a local government perspective.

IP15 No not in the development but I have been heavily involved in the implementation of strategies

in accordance with those already developed.

IP16 I have not been involved in the development of strategies but am heavily involved in responding

to procurement strategies from a tendering perspective.

IP17

No I have not been involved in the development of procurement strategies but I am often

involved in procurement from a tendering perspective. Aside from project management, I prepare

a large amount of the tender submissions for both civil and structural projects so I am very

familiar with procurement procedures and policies through this.

IP18

I have not been involved in the development of strategies at the corporate level however I have

significant experience in the application of procurement strategies and the engagement of

contractors and the like.

IP19

I have only had minor input into the actual development of strategies but the majority of my

procurement experience is through the engagement of sub-contractors or tendering on civil

construction projects ourselves.

Recently I was involved with providing input into changing the dollar thresholds around how we

procure and the requirements from a cost perspective. This was to provide some greater freedom

and allow easier procurement for light items as the previous thresholds were at levels that didn’t

align with typical costs of things in the current industry for smaller type items. We now only

need one quote for anything under $25k whereas before anything over $10k required three

quotes.

IP20

Yes I have. I’ve been involved in developing how we will go about procuring our sub-contractors

etc. or whether we will just self-supply.

I’ve also been directly involved in the preparation of tender documents in response to strategies

employed by agencies who are procuring for the delivery of civil infrastructure projects.



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Appendix F Common Procurement Strategies



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ID Common Procurement Strategies Sufficient Scope for Performance

Measurement

IP01

Our most common strategies are design and

construct and traditional lump sum. Third used

strategy but not often is the construction

management format.

Unwritten law at the organisation that for

projects under $1M a traditional lump sum

format is typically used.

In the $2 - $3M moving to a design and

construct contract especially where there is

high risk.

No our strategies do not typically include

sufficient performance measurement.

Organisation is looking to increase current

focus on performance measurement.

Strategy however does not really dictate the

performance measures.

IP02

Typically open or closed tender process of

various types. We prefer invitation only

process.

Yes, there are typically structured

performance measures under the strategy

that are utilised on the project.

IP03

Typically the most common is still the

construct only approach. Appears to be a shift

occurring on the bigger project toward ECI and

design & construct arrangements.

Yes there is always sufficient scope for


IP04

Long period for construction projects where it

was always cheapest price wins but this started

to change towards quality assessment. Non-

price strategies are typically used these days.

Yes they do.

IP05

We are governed by legislation governing our

procurement strategies. Most common

strategies are bundling or project, industry

briefings first, splitting project, appears to be

trend towards strategic sourcing and category

management.

Yes there is sufficient scope for performance

measurement.

IP06 Most common strategy is Principal design and

the go to open market tender for construction.

Yes the strategies allow for the adoption of


IP07

Typically design first and then construct. We

are governed by local government act.

Yes procurement strategies allow for

sufficient performance measurement and do

not prohibit adoption of project specific

measures.

IP08

Most common is two stage design and then

construct. Some larger project are D & C but

typically most are design first, then call tenders

for construction.

Yes they do but often not 100% clear what

the measures are.

IP09

Most common strategies are schedule of rates,

construct only. Target cost reimbursable

contract are also common. I prefer D & C.

Yes, just about all strategies have

measureable KPI’s.

IP10

Typically design in house and then go to

construction.

Yes I have not found that the strategies

provide generic measures and then allow for

the adoption of project specific measures.

IP11 It depends on the project but we will use a mix

of price and non-price criteria in our strategies.

They absolutely do, there is no prohibition in

the adoption of sufficient measures.

IP12

It’s typically a mixture of price and non-price

components used in strategies. Private is more

price driven approaches.

Yes particularly in public service project

where there is a strong focus on performance

measurement.

IP13

The strategies are typically always heavily

price focussed with other considerations such

as experience.

Yes they do.

IP14

In my opinion the most common procurement

approach that I see and have been involved in a

design and construct procurement approaches.

Most projects have a performance aspect and

criteria to them. This is typically approved by

a local or state agency that is implemented

through the procurement strategy and

monitor on the project. This is then back to

the administrators of the project to implement



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and monitor through reporting mechanisms

etc.

IP15

Construct only is the most common procurement

approach used.

The procurement types have a number of set

performance measures already which are

utilised on the project. They do not prohibit


IP16 Construct only and design and construct. It doesn't really prohibit the adoption of


IP17

I find that the majority of works are still

procured under a design and then construct

arrangement. Sometimes you will see the odd

design and construct project but these are not all

that common from what I have seen.

On very large projects you will sometimes see

alliance type arrangements in place but this

doesn’t seem to happen much anymore will

traditional design and then construct still making

up the majority of strategies.

I think so. The strategy doesn’t really

determine what will be measured in regards

to performance, it more so sets up the

environment for which performance

measurement can then be conducted. i.e. the

measures on a design and then construct

project could be different to those on a design

and construct project.

IP18

I have found that design and construct is the

most common type of procurement strategy used

in the projects that I have been involved on

throughout my career. A lot of our projects

although D & C, we typically have the design

relatively progressed first, then engage a

contractor through a D & C strategy to finish the

design and undertake the construction. This is to

minimise the differences in cost from the initial

design to what is completed on the ground.

In my experience, the worst case I have seen for

a bare bones D & C was a cost difference of

between 30 to 40% from what was initially

budgeted to what was actually design and

delivered. We try and avoid this by initially

progressing the design to a comfortable stage

before engaging the D & C contractor.

The procurement strategies don’t typically

dictate what we can and can’t measure. We

adopt what is required on a project specific

basis which are typically always the same

kinds of measures.

IP19

The most typical ones that I find used are

construct only approaches where the design has

already been completed, we tender on it and go

and build it.

Yes, it does, with our approaches focussing

primarily on cost which is probably not the

best way to do it.

IP20

It depends on who you are working for and what

they want to deliver. The majority of projects

that I’ve been involved with are design and

construct strategies.

Yes, the strategy allows for project specific

measures to be put in place.



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Appendix G Price Based Procurement



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ID Price Based Procurement Specific Impact Areas

IP01

Typically deliver poorer quality outcomes but a

non-price strategy does not guarantee a greater

outcome.

Can get someone that seriously cuts their price

because they are so keen to work and will do a

good job.

Typically if you choose the right people,

experience, methodology rather than just price

it should generally yield a greater outcome.

Price based procurement creates so much focus

on price that it can lead to difficult

relationships as the Contractor is trying every

which way to make some money.

Quality

Relationships

Under – resourcing

Corner cutting

IP02

Typically when adopting the lowest price this

ends up in a lot of variations, delay and

disruption to the project ultimately impacting

on the project outcome.

Variations (cost)

Time (delays)

Disruptions

Omissions and rework

Safety

Quality

IP03

You get what you pay for. Often it works out

the same regardless of approach it’s just how

you pay for it. Cheaper contractors will cost

you in variations. Definitely feel price delivers

a poorer outcome when compared to non-price.

Experience of personnel on the

project

Quality

Costs

Relationships

IP04

Cheapest price tries to cut corners, lower

quality, scope omissions, not following

specifications

Quality

Time

Resourcing

Relationships

IP05

May not impact on the outcome greatly,

depends on the Contractor and culture of the

Contractor.

Quality

IP06

Greater conflict between the Principal and the

Contractor due to variations. Corner cutting

Quality

Time

Relationships

Environment

Safety

IP07

From our perspective being a local council

price based has often ended disastrously for us. Quality

Time

Fit for purpose

IP08

Price based has associated risk in terms of

variations. This is to supplement the low price

if a Contractor has gone skinny on price.

Resourcing

Quality

Time

IP09

Not such a bad thing. Lived with that for 18 out

of 35 years’ experience. Differs though and

dependent on the project. No good if lots of

changes expected.

Price

Quality

Time

IP10

I think there could be major issues on a price

only approach especially if little is known

about the Contractor.

Quality

Resourcing

Time

IP11 Pro’s and con’s to both. Quality

IP12

Very cyclic industry, depends on economy. Quality

Timeframes

Resourcing

Cost



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IP13

Makes you think harder and smarter about how

you can deliver a project. Achieving maximum

outcome for lowest price. Depends on the

market. I don’t think there would be a huge

difference. Comes back to having good quality

documentation and a good brief.

Cost

Quality

IP14

You often realise that you pay for what you get

and in some instances clients will go for price

only and, not all the time but some of the time,

this does come back to have ‘hidden’ costs

associated with that approach.

Time

Cost

IP15

I think regardless of the approach it is, to a large

extent, dependent on the contractor that you get.

When you go out to the market, you have an idea

of what kind of dollars to expect. If a price

comes in that is unusually low compared to what

you expected to pay then, you automatically get

a cost buffer built in. At the end of the day, the

project will end up getting back towards the

initial true cost that you were expecting in the

first place.

The outcome isn’t impacted so much by a price

only approach, but where the issue is, is that

there could potentially be a lot more pain in

achieving that outcome if the strategy was price

driven.

Relationships

Costs

IP16

It becomes a contractual nightmare because

everyone is fighting for every dollar. If it is

purely price based it is sometime difficult to

achieve high quality as everyone is always

looking at the bottom line and looking for any

opportunity to cut corners. It creates relationship

issues due to the push for dollars. We have

recently come from a project that was 70% price,

30% non-price and have now come to a project

with the same client but it is 100% price driven

strategy and we are already having issues

because of this.

Quality

Relationships

Traffic Management

Community

IP17

It's difficult to say especially given that price

strategies can be influenced by so many factors

i.e. in the current environment just because you

get a cheap price doesn’t necessarily mean

anything of detriment, it could simply be a

reflection of the current economic situation

where there isn’t a lot of work.

Personnel and experience

Relationships

Quality

Time

IP18

It doesn’t necessarily change the outcome, but it

impacts on the way that you get to the outcome.

It can be a lot more difficult from a contract

administration point of view to deliver a project

that has been procured purely on price because

of the intense focus from the contractor about

trying to find dollars.

Quality

Relationships

Experience

IP19

You tend to get people buying the jobs who

don’t necessarily have the right experience or

skills to deliver the job. I find that if it’s price

only, there’s always a push for variations to try

and make some dollar out of the project.

Experience

Relationships

Conflict

Quality



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You have to be careful in regards to what is and

what isn’t included when you are going for price

only. Often price only approaches will have

many qualifying elements and fine print about

what is and isn’t included as part of the price.

We’ve been burnt in the past with sub-

contractors where we have gone on price only,

only to find in the fine print that there is a

minimum quantity that has to be constructed,

whereby they’ll charge you for this amount

whether they construct that much or not.

IP20

As long as the work is scoped well and to what

the performance characteristics need to be, a

price only approach still works well and won’t

necessarily change the outcome. The key is to

ensuring that the project is defined well and that

the Contractors are pre-qualified, which covers

off on the non-price elements, then there

shouldn’t be any issues.

It depends on where the project is at though. If

for instance it’s a D & C where the Principal is

looking for someone to take, say a concept

design, and then turn it into a finished product,

you need to consider the non-price elements

otherwise you may not get what you want.

Relationships

Cost



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Appendix H Non-Price Based Approaches



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ID

Does Non - Price Based Procurement Lead

to Better Project Outcomes when compared

to price based procurement?

Does a Non-Price Approach create

additional project costs?

IP01

Generally yes, non-priced procurement should

typically yield a greater project outcome.

…it is a complex mesh that should typically

yield a greater outcome. For me it is

fundamentally the personality meshing of the

team that is going to result in the best outcome

as they understand each other, they talk to each

other, they work together to come up with the

best result, not necessarily the best and easiest.

Generally if everyone has the right fee, i.e. the

consultant is happy, the contractor is happy, the

client is happy, you get a greater outcome.

Happy projects, are typically successful

projects.

It can create additional upfront costs as

typically the assessment process can take

longer, require greater resourcing as well as

the fact that the cheapest price may not be

the price that is accepted but from

experience, cheapest price can often result in

additional costs during the project through

variations for example that may not have

come up otherwise. Overall it’s difficult to

gauge one against the other however, no not

generally when looking at the overall cost of

a project.

IP02

Far better outcome for a value or non-price

approach. At the end of the day, the price you

start with, isn’t the price you end with.

Typically when adopting the lowest price this

ends up in a lot of variations, delay and

disruption to the project ultimately impacting

on the project outcome.

In the procurement phase yes there is

additional cost for both the Contractor and

the Principal due to increases in the

preparation of the documentation, the

submission requirements and the assessment

process. However ultimately, it leads to

better outcomes overall and reduced hidden

costs.

IP03

Yes definitely as a project can be better

serviced to the level required to achieve the

desired outcome.

Yes it probably does slightly as the quality is

paid for upfront but ultimately over the

duration of the construction project the costs

are very similar due to variations sought

when a contractor has supplied a low price.

If three contractors have priced a project in

the order of $750 million while a fourth has

priced it at $500 million it would take a very

good contractor to be able to actually deliver

that project for $500 million. There’ll end up

being $250 million worth of claims of which

$150 million may be approved but during

this process there has been a lot of heart

ache, pain and time required in this process.

It may end up coming out marginally less

but in the end I don’t believe it is worth it

when looking at the areas that are detracted

from.

IP04

Yes as it is important to always try and

maximise the project outcome but there always

has to be an element of price to ensure that

project budget is still achieved.

No, but it is very difficult adopting this

approach as many of the non-price elements

are very subjective and difficult to justify

your outcomes. When looking at the whole

of life project costs, a non-price approach

does not typically yield increased costs, and

it is better for relationships as there is not

such a large focus on the fight for dollars.

IP05

It could do, but the subjective nature of the

non-price areas makes it difficult to quantify. In

assessing Contractor’s during the tendering and

award process they can sound brilliant on paper

and then they turn up on site and they are no

good. Assessing non-price areas does not

guarantee

Not necessarily, but it depends on the

project.



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a greater outcome but yes it should generally

lead to better outcomes. It is difficult to get a

true measure of non-price criteria. This make

price assessment so easy as $1 is always going

to be less than $3.

A good client organisation with robust,

defensible records of past project performance

would certainly be able to get some better

outcomes on future projects by using these

records. The difficulty is in getting good

quality data out of these measurement systems

and keeping this data consistent to allow

comparison. Even small things such as a

Superintendent’s opinion of a contractor can

skew this data making comparison’s difficult

on a project to project basis.

In previous experience I am familiar with a

certain Contractor who has a track record of

being very difficult to work with. This has been

ongoing for 15 years and is still continuing

today.

They are very claim driven and this creates

tense relationships. The issue is that over these

15 years there is no solid records regarding

their performance so defending a decision to

exclude them from the tendering process is

extremely difficult and cannot be done.

IP06

Yes, I believe it improves the project outcome,

not only from the viewpoint of the asset that

gets delivered but also the quality of

relationship between the Client and Contractor

is greater which is important for future projects.

The only issue is that target estimates are

usually inflated compared to price only tenders.

Yes as normally there are higher overhead

costs due to increased staff numbers, site

facilities and resources that are allocated to

the project as opposed to price driven where

the Contractor will take a bare minimum

approach to resourcing to save costs. There

is also typically greater contingency in the

prices to cover project risks and the profit

margin, which is normally agreed upfront,

tends to be higher than a price driven

approach.

IP07

Yes absolutely but that doesn’t mean that a

cheap Contractor can’t do a good job.

Sometimes you get lucky and a Contractor will

rate well against things such as experience,

capability and also be the cheapest.

Not typically, in consideration of whole of

project costs you can basically end up in the

same place from a cost perspective. If

you’ve got good relationships with your

Contractors you make sure that they are

making some money, we are getting what

we want and that things are still coming in at

a good value.

IP08

No not necessarily, there needs to be a good

balance between both price and non-price

criteria to ensure value for money. This allows

the right team to be dedicated to the job with

sufficient resources, time and cost to deliver the

project while still ensuring that costs do not get

out of hand.

One thing about a non-price strategy is that it

actually requires the Consultant/Contractor to

think about how they are going to deliver the

project and have a sound methodology, process

At the moment the industry is moving more

towards an initial EOI phase before going to

full tender. This is a good move from the

industry as it allows all interested parties to

provide an initial response from which then

only a select few are invited for full offer.

This is a good move as the effort to respond

to an EOI is significantly less which reduces

tendering costs significantly.

I don’t think that by adopting a non-price

approach, there are necessarily any

additional costs.



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and systems in place to demonstrate to the

Principal that they can effectively deliver the

product. It removes the price element to a

degree and makes them focus on the other areas

that they can bring to the table.

IP09

No, but again it depends on the Contractor.

Some will game the system in that they can use

safety and traffic, for instance, as justification

to do something that costs the Client in

variations on the basis that there’s a safety

issue which can be justified by a standard but at

the end of the day is there actually a hazard or

just a theoretical hazard?

It’s entirely on the job and circumstances

and how many changes there are. If there’s

no changes in the job, you’re better off with

the pure price strategy but if there’s

expected to be lots of changes you’d be

better off with something like a target cost

reimbursable arrangement.

But it’s also important that the Client is well

informed, aware of the contract conditions

and knows what they are on about otherwise

they will tell you not to do things that really

should be done.

IP10

It can, but it depends on how clear you are with

your scope and what you ask for.

Not so much because we would be more

confident in what they were going to deliver

and the overall projects costs could actually

be less due to savings in variations. This also

means that, if we were confident in their

ability and experience, we don’t have to

manage them as much.

IP11

Not necessarily, this comes back to the way a

project is documented and scoped and as long

as this is done clearly and concisely you should

be able to achieve a similar outcomes.

No, not when you consider the overall costs

of design and construction. Often what can

happen is that the lowest price will end up

costing large amounts in variations and this

causes greater costs than were expected.

IP12

Yes, the quality will definitely improve, the

timeframes will be more realistic and the team

performance would generally be better because

you have the time to do the proper reviews and

checking.

Yes the Client will pay slightly more but

then benefits and the quality far outweigh

the cost in the long term. This can also help

with whole of project costs as it can result in

less variations.

It allows you to cover the risks better and

with more attention.

IP13

A lot of the time I don’t think there would be a

huge amount of difference but it comes back to

having good quality documentation and a good

brief from the Client. I think these are the two

keys to a good, or bad outcome.

Not necessarily.

IP14

Not necessarily, in a competitive environment

there could always be someone who could

deliver the same product at a cheaper price.

It sometimes can, but that comes back to

knowing your contractor and what they can

bring to the table from a whole of project

perspective.

IP15

No not necessarily. If you wanted a four lane

road to start with you will still get your four lane

road but it’s about how you got that four lane

road that is impacted by the choice of strategy.

The benefit with a non-price approach from a

tender assessment perspective, is that it gives

you more flexibility to select the contractor that

you may desire.

No not necessarily. Similarly to the response

in P-5, you always end up around the

expected costs of the project that were

initially budgeted for.

IP16 It depends on the project. A non-price solution

works out better for both the Contractor and the

Client. A non-price approach allows for you to

Not always but it depends on the project and

the complexity of the job as well as the

definition of the project scope. If they aren’t



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choose the Contractor that you want as opposed

to someone who’s purely trying to win the job

based on price.

sure what the job is and what they want out of

a job, a non-price approach makes this a little

easier – it allows them to change the scope a

bit easier as opposed to a hard-line bottom

dollar procurement approach.

Ultimately it comes back to the project

characteristics as to which approach should

be used.

IP17

Potentially yes as the outcome can be a

combination of things such as the relationships

that are formed during delivery. At the end of the

day, it may not change the asset that is ultimately

delivered but it can impact on things such as the

way traffic is managed, the way community

relations are handled, the impacts on the

environment during delivery. For instance, if the

contractor is tight on dollars regarding that

budget allocation for environmental protection,

he may just go with the bare minimum to

achieve compliance whereas a contractor who

isn’t tight on dollars may provide what would be

expected as opposed to just the bare minimum.

As mentioned in the previous questions, I think

the biggest impact area is around relationships

whereby with a non-price approach there won’t

be as big a push for every variation and the

contractor will be more likely to work with you

and ‘give a bit’ so to speak.

Contrary to the previous question it can have the

opposite impact on time in that more time can be

allocated to correctly suit the tasks at hand and

therefore a greater level of detail and focus can

be given to achieving the right result.

In terms of the entire project I don’t think it

does. A project will always have an expected

dollar figure or estimate and I think both

approaches would typically end up being

somewhere around that figure regardless of a

price or non-price approach. The difference

would be how you get to that figure i.e. price

only might be low initially but you get

towards this figure through variations, a non-

price approach might be closer to this budget

figure to start with and still have some

variations which move the ultimate dollar

amount back towards that initial figure.

IP18

Similar to before, I don’t think it so much

changes the outcome but it’s the way you got to

the outcome which is different. It impacts on the

way that you deliver the project. For instance, on

this project we wanted to achieve a certain

productivity rate for our piling works. To

achieve this, we had to accept that it was going

to cost us $1.5 million extra to get the piling

contractor that could achieve this productivity

rate. We could have gone price only and gone

with the cheaper contractor but we wouldn’t

have been able to hit the performance targets we

needed to deliver the project as we wanted.

No not necessarily, from my experience you

can almost guarantee that you will spend

more time administering the contract. The

cost and time required to manage the delivery

of a price only driven strategy can often lead

to greater costs. Usually you have to keep a

contract administrator on the project for 6

months after it’s finished to deal with the

number of contract variations and sort

everything out when it’s a price only

approach.

IP19

It can but you have to be careful about the way

you undertake this approach to procurement to

ensure that you can satisfactorily justify why

you didn’t go with the cheapest price.

No, I believe it does the opposite because you

cover everything and you don’t get hit with

the same number of variations etc.

IP20

I think that price plus other elements delivers the

best outcome for a project. But price only can

work if you’ve got it scoped and documented

correctly. The way to get the best price is to get

It adds costs up front in the tender phase of

the project for both the contractor and the

principal due to extra work in the preparation

and assessment of tenders. I don’t think it



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the best design, documented and scope correctly

for the contractor.

changes the delivery costs of the project

though. Whether it was price or non-price, in

theory the delivery costs should still work out

the same.



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Appendix I Procurement Processes



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ID Do you find that procurement is a difficult, vague and ambiguous process?

IP01

Not at our organisation as it has fairly defined views on what sort of project should be procured

in what manner. This is unique to our organisation and typically government sector due to similar

projects, similar risk profile, how much it is going to cost and how long it will take.

However, in commercial environments where minimising cost is an issue, it can become vague

because you are trying to minimise cost, as well as time, not necessarily looking to offload risk,

so choosing the right option could be more complicated and also disastrous if the wrong approach

is adopted.

IP02

Not typically, it is fairly structured in our area as most of our works are government projects. We

know exactly what the criteria is, we know how the assessment is done. There is always some

subjectivity in non-price criteria but is needed.

IP03

Not generally however it is made difficult by the government, particularly TMR and QR make

it difficult although this is often related to them needing to be transparent as they are government

organisation. It can be a fairly easy process if it is done clearly with well-structured policies and

procedures.

IP04

Yes and no based on the climate the industry is operating in. Subjective procurement approaches

are difficult because justifying why someone scored a 9 for quality and someone scored an 8.5

is very difficult. The difference between an 8 and a 9 could be that they make you confident they

can do the job well, while the other makes you very confident – this is difficult to justify. This is

made more arduous in a political environment. The losers are never happy with the procurement

outcome despite the best interests and process of the procurement team.

Procurement itself isn’t difficult especially with the structure around state government but it’s

dealing with the outcomes and the feedback requirements that make it difficult.

IP05 No due to structured processes and policies.

IP06

Not usually as there are typically well defined strategies and processes however for the

Contractors it could sometimes be seen as ambiguous due to non-price criteria. It depends also

on the quality of the documentation produced as if it is of a poor quality it can lead to a large

number of notice to tenderers as well as a number of request for information.

IP07

No not from our perspective. It is pretty clear cut due to our policies and procedures (local

government act). There is a lot of bureaucracy being government but that is the nature of the

environment that we operate in. This can make it difficult but just need to ensure transparency

and justification of decision making. There is also internal and external auditing that is carried

out to ensure that things are being done correctly and clear up any potential issues.

IP08

It’s a black art, I compare it to stormwater drainage! I refer back to the work we do in New

Zealand and they have a very clear prescriptive way of how procurement is done. You clearly

know what you need to hit and specifically what they are looking for.

From my perspective I don’t think that some of the state government agencies in Queensland

completely understand their own procurement strategies, procedures and policies and actually

don’t know how to apply them. An example of this is we have local staffed offices and you’ll

tender on a project with a high weighting given to local presence and yet a Brisbane based large

Consultancy with nothing more than a staffed phone in the local area will be awarded the job.

The feedback you get through the ‘process’ and the feedback you get off the record are two

completely different things. Often the preferred supplier is already known and they’ll manipulate

the numbers to get the one they want.

This can be a catch with the EOI process in that the Principal may already have an idea of the

three or four suppliers they want for a project, they go to EOI allowing them to easily eliminate

the tenderers they were never going to go to in the first place without needing to provide

justification as you would in an RFT.



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An example of this was we put in four bids for active transport projects with a large city council.

The first bid, we were told we had an excellent engineering team but we were too high on price.

The next two bids, we had the same engineering team, we reduced the hours somewhat to reduce

the cost and we were actually the lowest price – we were told they didn’t think we had enough

hours dedicated to the team so we lost that bid. This went against the procurement strategy which

was price driven. On the fourth submission, through all the different weightings we lost that bid

by 0.2 points. Off the record, person A from the council knew Consultant B and, perceive it the

way you want, Consultant B won all projects. In my opinion this is an example of manipulation

of the scoring system on a strategy that is not solely price focussed.

IP09

Yes, of course. There’s so many different contract models and approaches and Client’s will

sometimes try and cherry pick bits and pieces and throw them together and it doesn’t really work.

They for instance want target reimbursable contract applied to that bit of the project, and this bit

of the project we’ll apply schedule of rates which creates a whole heaps of grey area in between.

This can be exploited by the Contractor and conversely can be exploited by the Principal.

Ambiguity in the delivery of the strategy and the administration of the contract happens all the

time.

IP10

If you ask the people that put this stuff together, they’ll tell you that it’s a simple process but if

you ask my officers they’ll tell you that it’s not. But this somewhat comes back to lack of training

and understanding of the procedures and just appreciated that we are under legislation and that

we need to do it a certain way. Personally I don’t think it’s arduous and it’s there for a reason to

ensure we aren’t wasting money. It’s a risk based approach to ensure that you are getting the

right number of quotes etc and can justify the decisions made.

We need to be able to adequately justify all dollars spent and the procurement policies that we

act under help us to do this.

Of note is that the legislation under which we operate regarding procurement is the same for

everything that is procured not specifically just for engineering and construction projects which

is why we need to add project specific elements to our strategies. The policy covers everything

from the purchase of a new computer to the construction of a new road.

IP11 Not necessarily as the systems are typically well defined and in place with clear guidelines.

IP12

This is currently being made difficult due to lack of experience, foreigners coming in that don’t

understand processes and systems, you have very poorly scoped briefs coming out making it

difficult to know what the Client wants. Knowing what they want and what they can actually

have make it difficult to prepare a correct, well scoped and well-priced bid.

It is time consuming from the perspective that many agencies have a panel that you need to be

on to be a preferred supplier. To get on this panel you need to demonstrate appropriate

experience, systems and resources. Then you need to show this all over again when bidding on

a project. Why do you need to demonstrate it to get on the panel, then demonstrate it again for a

project?

Every time you prepare a tender it costs money so having to demonstrate these areas time and

time again is very costly especially in today’s market. As an example, five years ago, our winning

ratio was one in three and these days it is closer to 1 in 7 or 8, sometimes 10. This is an indication

of current market conditions which creates significant additional overhead costs.

IP13

Sometimes I find it can be difficult especially if you are dealing with Client nominated suppliers.

I think if documentation is poor, it’s going to add cost to the project and it can make things more

difficult during tendering. It can also be made difficult by specifications include products that

haven’t been made for 20 years. This does happen believe it or not and this can add stress and

heartache to the process. I’d say one out of every three tenders we find products that can not be

sourced and it’s primarily due to old specifications that get continually recycled project by

project.



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IP14

The process of tendering is difficult due to the amount of information that is required to tick a

lot of boxes that aren’t the focus of the project.

In terms of the assessment of tenders and the implementation of strategies, this is not really

difficult due to structured policies and procedures on how to undertake the process.

IP15

No it’s not difficult because of the structured processes. When you get into a tough situation with

procurement it’s just about have the courage to employ the guidance from the policies and follow

the correct process even if it means tough conversations with contractors.

The procurement process isn’t difficult, but the issue is about corporate will to apply those

requirements because the industry will kick up a stink and run to ministers etc. from which you

will be asked to justify your processes etc.

It doesn’t matter how explicit the tender documents are, or how well you can justify your

decisions, there is always issues because you are dealing with businesses in a high stakes gain.

IP16

Our procurement of sub-contractors is very, very structured with set systems and authority levels

making the process very easy. Our system is time consuming but it is necessary to cover our

decisions and engagement of various sub-contractors.

Generally, in responding to tenders from market it is typically straight forward as it is very

structured. We don’t generally have any issues in tendering and responding to the chosen strategy

from the Client.

IP17

Not really, it’s always pretty clear cut but what makes it difficult is short response times and

sometimes a lack of clarity or definition around what the client wants. I often find that we submit

tenders where you just don’t have the time to give it as much attention and perfection as you

would like.

IP18

Yes, depending on where you are based and the skill sets that you have. Queensland is a good

example of that in that we have still lost the majority of our good tradesmen, and engineers to

the mining and gas sector. You tend to find that the people you can get or procure at short notice

are not the best people for the job.

IP19

It’s very difficult for us as a government contractor as there is a lot of red tape regarding us

procuring sub-contractors to assist us in the construction of a project. Before we even think about

procuring someone, we have to go to a procurement delegate, we have to justify why we are

choosing the particular sub-contractors and get their sign off, then we have to actually undertake

the procurement process and then we have to get approval from the procurement delegate. This

makes it very difficult. It was also made difficult previously in regards to being able to procure

sub-contractors due to the low thresholds but with the recent changes it has become a bit easier.

In regards to tendering on projects, procurement is difficult as often there is only short

timeframes to prepare and submit your bid.

IP20

Yes, it’s difficult because on a number of projects I’ve been involved in, the tendering process

has taken a lot longer than was originally set out. I think some of it is because of poor quality

documentation but I think more so, sometimes agencies don’t know 100% what they want to

procure to start with. The market will always come back with idea that the client may not have

thought of initially and this can draw the process out.

Timeframes make it difficult. The main issue is client’s not being certain on what they want to

deliver. They generally know what they want to deliver but there’s still too much grey so that

when the market comes back to them with three different shades of grey, they struggle.

They need to be prepared to accept less grey, or be prepared to accept sizeable innovation from

the contractors in relation to this grey. Whether that be innovation in regards to design

rationalisation or innovation in regards to technology.



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Appendix J Future Approaches to Procurement



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ID Which procurement approach do you think the industry should move towards?

IP01

I think there has been a general industry shift towards non-price approaches, but still need fair

value for money. Possibly choosing mean fee instead of lowest fee. Don’t want high or low fee,

want mean fee.

IP02 A balance of price and non-price approach as opposed to a price only procurement technique

which results in Contractors cutting margins, conflicts and difficulties in delivering the project.

IP03

The best project outcome I’ve been involved in has been a collaborative agreement. Started off

as an ECI and then the preferred Contractor was selected. Rather than going to a standard D &

C, a collaborative project agreement was drawn up. Worked very similar to a D & C and also an

alliance. It worked really well.

Each strategy has its place, for smaller projects under $100 million construct only but when

projects are in the order of $500 million a D & C or an alliance to some extent is probably a

better way to go.

IP04

Try to move towards 20 – 30% quality included in overall assessment on all projects. Trying to

get industry to understand this approach is difficult. Contractors will tell you that they are open

to this approach until they lose a tender.

Was involved in an ECI, design and construct process. Contractor put in lowest price but had

omitted elements of the scope and simply left bits out. In assessment of the tender, continual

back and forth asking for information on the cost of doing the omitted elements. This then

resulted in the procurement team adjusting their price which came in at about a million dollars

less than the next lowest tender. Procurement team developed a risk assessment process for this

tenderer assessing how difficult they would be to work with, likelihood of variation claims etc.

This process resulted in the second lowest price becoming the preferred contractor. The lowest

priced contractor then complained to a contact they had within the Premier’s office and the

procurement team was interrogated on how they had undertaken the process demonstrating that

although you can introduce non-price elements, the subjectivity of these elements makes it

difficult to justify procurement decisions and outcomes.

IP05

I would like to see the industry move towards performance driven specifications as opposed to

prescriptive specifications. Currently the industry engages Contractors with very prescriptive

specifications and standards that they must adhere to i.e. we want asphalt compacted to x,y,z, we

want asphalt layers to be x thick etc. Rather than saying to the Contractor, deliver us a new road

from A to B which needs to last for 10 years and accommodate a traffic volume of z. If it fails

during this period, the Contractor must come back and correct the issues.

In Europe I became familiar with this approach which means you end up in the procurement

space using different strategies such as build, own, operate. You can also introduce a

maintenance element in which the Contractor maintains the asset during the period.

The benefit of adopting this approach is it allows for freedom in the construction of the project

while still achieving the desired outcome. The issue is it can be difficult to specify the certain

performance criteria. One example was a section of roadway in a major city in which this

methodology was adopted. The life was 10 years or a certain AADT volume. At the end of the 9

year mark it was thought there was still a year remaining under the arrangement however the

Contractor pointed out that since the seventh year, the AADT volumes had actually exceeded the

specified volume and the Client ended up having to undertake the maintenance for the final year

as well as repay the associated costs for years 8 and 9.

IP06

From experience I would like to see the industry move towards collaborative project agreements

and the design and construct type approach. This leads to better relationships and has better

conflict resolution processes, the Contractor is paid on actual costs which can help to reduce the

cost of projects. This wouldn’t work on the smaller project though where it is more economical

for the Principal to undertake the design and then just appoint a construction contractor to build

it.



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IP07

I think that TMR’s approach to having a panel of pre-qualified Contractors works really well and

helps to push Contractors to maintain minimum levels and keeps the cowboys out. But again this

comes back to having the right systems and available resources to effectively utilise these

processes.

There’s not really one particular approach but value based procurement seems to deliver

effective results and works for all parties.

IP08

Moves toward value based approaches are becoming the norm these days and with the current

strategies to initially undertake an EOI phase before going to full tender cuts down the work for

all parties involved and is good for the industry. There’s no need to have say 17 full tender

responses when this could have been reduced to three or four through an initial EOI phase. For

us the cost of an EOI is about one third the cost of a full offer resulting in significant savings.

I think though that the strategy should be on a sliding price scale, whereby for low cost, low risk

projects you could adopt price only approach whereas for the larger projects a value based

approach with a focus on non-price criteria should be adopted.

The way that TMR handle the larger projects whereby they initially assess the non-price offer

and whoever scores the best they then open the price envelope is a good approach but again this

initial assessment can be manipulated and then if the price isn’t what they were hoping, they just

negotiate with the selected tenderer anyway.

IP09

You can’t really go one way or the other. It really depends on the project and selecting a suitable

strategy for the project type and conditions.

I like the approach that TMR adopts whereby Contractors are required to be pre-qualified and if

you are on this panel then that should mean there are no other questions apart from price – lowest

price wins. If you are on the pre-qualification list, why does there need to be any further

assessment of your ability to deliver the project?

IP10

I definitely think the industry should try and move away from price based procurement and place

an emphasis on past performance and quality including their systems especially on large projects,

high risk projects and large dollar projects.

From a local council perspective, it took us a long time to get the powers at be to understand the

value for money approach and that by utilising our own crews we were actually get the same

product at a cheaper price when opposed to using Contractors. An example is roads that have

been reconstructed by Contractors and these are now failing which is blowing out whole of asset

costs whereas the ones done by local crews are not having these issues.

IP11 Move towards value based procurement that considers both price and non-price criteria. I have

never been in favour of purely priced based selection.

IP12

I believe that there needs to be a balanced approach to procurement in that you don’t like to

create laziness, and we don’t want to go back to the 2008, 9 and 10 periods where due to the lack

of resources we have to go through a dramatic increase in labour costs. You need to keep the

world real and price always needs to be considered to keep the project realistic while also

incorporating non-price measures to ensure the desired outcome can actually be delivered.

IP13

Personally I would like to see it move towards more of the design and construct type

arrangement. It’s nothing against Consultants I just find that a lot of firms are backwards when

it comes to understanding construction and methodologies.

There are new technologies that are coming out every day that are not being understood, utilised

or implemented by Consultants whereas in the D & C space you can have this input and ensure

that things are utilising the latest and greatest in regards to methodologies and construction

processes. For instance, we recently undertook a project that was design and then build. During

the construction phase a new drainage system was required as part of the works, we queried the

Principal because it appeared that no consideration had been given to how the drain could be



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maintained. As a result, we were engaged to develop a new solution working with the

maintenance department – in a D & C environment this would have been avoided.

Even simple things like Engineer’s undertaking inspections – we’re in a market where everything

needs to be built yesterday. Days of 48 hours’ notice to get an Engineer on site for an inspection,

it’s not good enough anymore. Client’s want more in less time these days.

IP14

I don’t necessarily have a preference, however I do find that the design and construct approach

has the advantage that you build the relationships with the people that you are designing an

outcome for, this creates strength and reliability in the team dedicated to the outcome.

There always has to be a balance between price and non-price criteria so you can objectively

select contractors, if required, based on price but it is also important to have the non-price

elements to ensure you get the right contractor for the project.

IP15

In my opinion I think a hybrid of the alliance type arrangement could potentially work well. With

a traditional design first then build, the client has ultimate control of the product he desires. With

a design and construct approach, you loosely get what you want, but not specifically because the

control around the design has been lost by the client. In my experience, you get compromised

situations in D & C because the driver is not about outcome, it’s about price and the contractor

is doing things for the wrong reason. The driver is always going to be the contractor’s bottom

line in a D & C arrangement.

My view is that a traditional construct only works well but it could have some non-price criteria

to allow you to better select the appropriate contractor.

IP16

I think the industry is going away from the alliance approach to procurement and I don’t think it

will ever go back that way. This is good and bad. Alliances make it easier for the Contractor in

terms of the environment to work in because you know you are going to get paid for what you

do. What it does do though is it creates laziness in engineers such that hard dollar contracts you

need to be sharp with your quantities and how you are going to get paid for every item and how

each bit of gear that is doing work is going to be covered – you don’t need to think about this in

an alliance situation.

I think you still need a combination of both price and non-price relative to the job is the key. I

like the design and construct approach to procurement and that there should be more projects

undertaken using this approach. Construct only you see sometimes that they have to rush the

design to meet certain deadlines and this sometimes leads to missing the key reasons as to why

the job is happening.

It is important to get the procurement approach right in order to achieve the best for the project.

The current project we are delivering had a very short design time frame and we are already

finding significant issues. In 4 weeks we’ve submitted 30 RFI’s already. Given the short design

timeframe, an alternative procurement approach may have been better suited as opposed to the

construct only approach that has been used in this case.

IP17

It depends on the project but I think the use of either a design and then construct, or a design and

construct approach works well.

On projects that are relatively simple, have low risk, few complexities and are just your everyday

run of the mill projects, I see no issues with using a design and then construct approach. On these

projects there’s really no need for a contractor to be involved early on in the process and can

easily be handled by your typical design consultancies.

On more complex projects though which may include greater risk and require the use of specialist

techniques or skills, I think the design and construct approach is the way to go as this allows for

the contractor to be involved early on in the project lifecycle and provide input during the critical

phases of design. If a construct only approach was taken with this type of project, it opens up the



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client to greater risks and prohibits the ability of the contractor to identify, what could be, more

efficient and effective construction solutions.

IP18

I think the industry should stick to design and construct type approaches as I think there is a lack

of the required skill sets and experience in consultancies across the board to deliver a well-

documented, detailed and finalised design for construction. I don’t think I’ve seen one in 15 years

in regards to complete and accurate documentation.

IP19

It’s always good having a design and construct approach because, as the contractor, we can have

input into the solution and you aren’t constrained by the design as you are in a construct only

approach. Sometimes with that approach the design is not always the right one but at that point

there is little room for changes. Sometimes you are on site and you know what should be done

but you’re restricted because the design has already been documented and signed off, it’s a bit

frustrating.

I think that design and construct is the way to go.

IP20

I think the economy gets best value out of design and construct because I think contractors are a

lot better at managing the design then the clients are because the contractors are motived to

provide an efficient design i.e. meeting the functional outcomes while not gold plating the design.

If we want to build more infrastructure for the same cost, I think the best way to do it is through

D & C.

I would say the types of strategies used have reverted back a little in that there doesn’t seem to

be as many alliance strategies used anymore. Money is tighter, margins are tighter. I think the

reason for the recession away from alliance strategies etc. is because I don’t think client’s

believed they were getting the value for money from these strategies given the current market

conditions. Also the reduction in work has made contractor’s hungrier and clients have probably

worked out they can get better value using competitive price procurement approaches.

I think there would be more benefit to the community if performance driven specifications were

utilised to a greater extent. It would cost less and therefore you can deliver more of it for the

same amount of money.



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Appendix K Performance Measurement Experience



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ID Participant Performance Measurement Experience

IP01

I am not particularly experienced in regards to civil works as what we build is typically light

weight – car parks, buildings and roads. We see little benefit in going into detailed performance

measurement because it would yield little benefit.

The organisation does however have a prequalified tender list from which Contractor’s must be

selected. To get on this list the necessary paper work must be completed and relevant

experience in projects to that undertaken by our organisation must be shown. Through

continual use of these Contractor’s a typically benchmark is established and this alone can be

used when determining what to expect from appointed Contractor’s.

IP02 I’ve been involved in performance measurement for the majority of my career, preparing

reports, reviewing reports, assessing outcomes of performance measurement.

IP03 Experience through reporting, performance meetings and monitoring of construction

Contractors.

IP04

I am directly involved at the moment for design consultants yes. Prior to this when doing

construction supervision in the UK it was always priced based and no element was given to

performance and hence did not get measured.

IP05 I have been involved from the level of overseeing and monitoring project performance and

preparation of associated reporting.

IP06

Monitoring of construction contractor’s on projects, assessment of their performance and

completion of reports. Participating in workshops for relationship management and trying to

work better together.

IP07

Through the measurement of quality against specifications, supervision of the contract on a day

to day basis for quality and conformance as well as the preparation of performance reports as

well as things such as site instructions to correct conformance issues etc.

IP08

Not overly, when I have been involved it’s from a post project completion perspective looking

back at how the project went and performance areas that could have been improved or were

done well etc.

IP09 Yes I have. Involved in performance meetings and scoring of teams.

IP10

I’ve been involved to a small extent, more so on the design side, attending regular meetings to

monitor consultant progress and performance as well as reviewing reports that were submitted.

I was also involved in the monitoring of waste management contracts which had very specific

KPIs in which I was monitoring, recording and recording performance against various KPI’s.

This was a high risk contract worth a large amount of money to council hence the

implementation of many KPIs to assist in successful delivery of the project.

IP11

I have experience through the preparation or project performance reporting, meetings, pre-start

meetings and post construction meetings and workshops to discuss the outcomes and

performance of the project.

IP12

Yes I am heavily involved in the monitoring and reporting against performance measures and

KPI’s. This is typically done on a monthly basis and involves the preparation of charts, graphs

and reports to demonstrate the month’s performance.

IP13 Yes I have experience through the monitoring of KPIs on construction projects and of course

operating on projects against KPIs.

IP14 I’ve been involved from a monitoring and reporting perspective on projects.

IP15 Through the preparation of monthly performance reports and participating in workshops with

contractors regarding this reporting.

IP16

We have a supply management system in place that we use for our sub-contractors. Through this

system we monitor the performance of our sub-contractors and undertake regular reviews on

them across various performance categories. We score them from 1 to 5 across various areas

such as quality, safety, timeliness etc. and we use this to either procure sub-contractors or if they

are performing poorly we will have them removed as a supplier. This system has only been in

place for 2 to 3 years. Before this, we monitored performance but nothing was documented or

recorded and was only project specific. The new system is across the whole company allowing

for transparency across all sub-contractors.

I have a team of engineers on projects that undertake this process which I then review, prepare

reports and authorise the engagement of sub-contractors.



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IP17

I have been involved from the perspective of being measured and the perspective of measuring

our in-house performance. This has included preparation of reports regarding performance,

participating in performance meetings.

IP18 From a reporting and monitoring perspective on the contractor delivering the works.

IP19

I’ve been involved from the perspective of monitoring and reporting on sub-contractors as well

as being monitored in regards to our performance as the Principal Contractor. We get monitored

and reported on monthly and any issues regarding our performance is addressed in these

meetings. We also then get an overall learnings report which takes into consideration how we

have performed on the project, what went well, what didn’t and how we can improve on the next

project.

IP20

For the delivery of civil construction projects, I’ve been involved from the perspective of having

people report on those measures to me or I’ve been reporting to a superior on the measures and

carrying out the performance measurement and reporting.



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Appendix L Common Performance Measures



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ID Common Performance Measures

IP01

In the organisations structural works as opposed to civil works – which some could be

transferred to civil if required:

Square metre rates as a first benchmark;

Trade package analysis of rates (not normally done however);

Time to deliver the project;

Variation types, causes, number of.

The organisation is trying to get more sophisticated regarding measurement of quality both

through their procurement process i.e. who they procure as well as in measurement of quality of

what is being delivered. Would rather spend an additional $100K to ensure quality of

deliverables upfront as opposed to $500K through poor design and documentation that results

in a large number of variations at a significantly increased cost. This is a result of past

experience where we have been burnt but also a shift in the industry. If this approach was tried

10 years ago when building and designing was flat out, no one would listen as everyone had

plenty of work and would just move on to the next job, however the industry is not currently in

that phase. We have a lot of current Consultants and Contractors who are more than happy to

increase their quality of work to try and achieve greater results, particularly as the environment

is currently highly competitive. 10 years ago you got what you got, whereas now the lack of

work, increased competition as a result is opening doors regarding quality.

IP02

It depends on the project but typically as a Contractor, measurement focusses on safety,

environment, timing, cost, traffic, community, quality. There is a lot of quality data that is

looked at in the measurement of our performance. Problem being with all of this data is that it

is lag data and always a minimum of a month behind.

This lag can, in some instance, be somewhat mitigated by using lead indicators for things such

as safety where the number of work hours can be a lead indicator for fatigue. This isn’t possible

though on cost and program.

IP03

Typical measures include, quality, safety, environment, cost and time are the five standard

items but also includes teams, project management performance, experience, knowledge.

Some projects will go as deep as measuring the number of non-conformances that are raised,

public complaints received but typically depends on the project. I believe that focussing on the

higher levels is a better approach.

IP04 Quality, time, relationship management which is very subjective and cost.

IP05

Timeliness

Quality

Safety Management and Enviro Management

Community impacts/inconvenience (including traffic management)

Relationship / teamwork (a fluffy – used in many of the earlier alliance/partnership delivery

models)

Claimsmanship (difficult to measure as there are many factors, many of them caused by the

client, that result in claims)

IP06

Many agencies now employ pre-qualification processes as an initial performance measure to

minimise the number of Contractors that can tender on works. On a project basis the areas that

are typically measured include time, cost, cash flow targets, quality, lot area opening and

closure rates, environment – noise, vibration, dust, flora and fauna, traffic, using blue tooth

devices to measure travel time. Safety – near misses, LTIs.

IP07

Conformance against the specifications, quality, time and safety. There is some measurement

of environment but not a lot due to our projects typically being low risk in regards to potential

environmental impact.

IP08

Every Client wants you to deliver a quality product, on time with no variations. Our mandate

is that we try and always deliver a quality product on time with minimal additional cost to the

Client. If that means it costs us a little bit, that’s how it goes and it’s just part of the process.

IP09

Performance measures for safety, traffic management, community, quality, time, cost, and

environment. In regards to quality, it’s almost impossible to do a job without some NCR’s, not

because the quality is bad, but just the way the system works. In some instances now, the way

the specifications are written you actually have to raise an NCR when you get to a certain point

in order for the Client to agree to a method of dealing with that particular issue. This provides a

paper work means of dealing with the issue, rather than a fault on behalf of the Contractor.



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IP10 Milestones, certification, quality, time, cost.

IP11 Past performance, experience, personnel, reliability, quality, time, organisational structure and

background, cost, work health and safety risk.

IP12 Quality, time, relationships, resources and team, capacity and capability, previous experience,

communication from a personal and team perspective.

IP13 Quality, safety (this is huge), time, cost, past performance, environmental

IP14 Processes, techniques, ability to satisfactorily deliver what it is that is desired. They are also

monitored heavily on safety.

IP15 Relationships, time, progress, quality of product, contractors team, capability and experience,

claims, disputes.

IP16

Construction management, community engagement, contract relationships, safety, traffic,

environment, quality. This happens every month. For the current project the Client established a

relationship workshop as this was critical to the delivery of the project.

Safety, quality are the two biggest. Claim management and time. But time is hard to judge as

there can be many reasons behind timeliness issues including the Client themselves.

IP17

These days most projects cover off on the same elements which include time, cost, quality and

also things such as environment, traffic management, safety, community measures. There also

seems to be a bit more emphasis on relationships these days.

IP18 Safety, environment, traffic management, compliance against various requirements of the

contract.

IP19 Time and cost are the big two. There’s a focus on safety (safety first), quality, environment,

traffic management, community complaints and relations.

IP20

Cost – regarding what you’ve spent, how much is left to spend to complete and comparison to

budget. Also how much your progress claim values align with your expenditure so that you cash

flows are correct.

Other measures include time, safety, environment, traffic management, community but these

ones are less tangible.



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Appendix M Scope for Performance Measurement



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ID Do procurement approaches allow sufficient scope for performance measurement?

IP01 Yes, but we haven’t taken advantage of performance measurement previously. We are

currently trying to increase the way it captures, records and processes data.

IP02

Yes, however the utilisation is often the issue. The data is gathered however this does not

typically lead to results as the same Contractors are still being invited to tender on projects

despite poor performance.

IP03

I think generally it could be done better. Projects typically have a standard template that has to

be followed. You get a score from 1 to 5. There always seems to be a reason or an excuse if

someone is performing poorly and this makes it difficult to really measure true performance.

Other methods used in major projects is more relationship performance, such as relationship

contracting but it doesn’t really get used much anymore. From experience with the RTA this has

worked well on some projects and worked very poorly on others.

IP04

Yes, especially with current organisations. It is typically part of the process these days and is

utilised but what is then done with this data is another issue. Current organisation more so use

procurement to ensure that a baseline is being achieved, not so much determine who’s the best.

Many Consultants believe that a higher score helps them however this is not the case. They are

ranked on a score of 1 – 5 across various elements and as long as they are achieving a minimum

of 3, it means they are doing everything they are being asked of. Whether a Consultant has a 3

or a 5, they will still be considered for projects. It’s if they are below the baseline (3) that they

may be excluded.

Current organisations only want to know about who is under performing and that is all it is used

for.

IP05 Yes, they allow performance measures. But no, measures are seldom implemented and even less

frequently monitored.

IP06 Yes, they do, measures can be implemented to suit the project however it is difficult to include

KPI’s without clear, accurate and agreed evidence and data.

IP07

Yes, they do and we typically write in performance measures on a project by project basis as our

strategies do not really cover this. The larger the project, the more emphasis that is placed on this

due to higher risks which council cannot afford.

IP08 Yes, because at the end of the day the Client is typically concerned with getting a quality product

that is delivered within the desired timeframe.

IP09

Yes, they do. Regarding whether they are utilised - On some jobs people just give lips service to

it but in the majority of cases people genuinely often try and achieve the best they can. What

tends to happen is they’ll score everyone low at the start of the job and then gradually these

scores will increase. At the end if you’re only half way up but you’ve doubled your starting score

that’s deemed a success.

IP10

Yes, our procurement approaches have overarching measures and then we write in our own

project specific performance measures as needed. The measures implemented under the

procurement strategy can be adjusted in terms of weighting to suit the project requirements and

needs. These are decided on a risk based approach, for example, this design is rather complicated

so we would increase the weighting on experience.

IP11 Yes, they do and we can always write in specific measures for individual projects if necessary.

IP12 Yes, and they do help in the delivery of a project but they are not the be all and end all regarding

the delivery or outcome of a project.

IP13 Yes, there’s always your common ones and it’s done on a percentage basis. There’s always an

item for environmental, quality, and safety. It also depends on the project though – measures will

be adjusted to suit the project. We had a project recently that was high risk and safety was ranked



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equally against price. This required us to give significant thought to our methodologies and the

safety aspect as this was a very critical element of the project.

IP14 Yes, they do with some overarching performance measures that are dictated through local or

state policy.

IP15 The strategies typically include some performance measures for a project which are pre-

determined as part of the strategy.

IP16 Yes, they do and all projects involve some form of performance measurement.

IP17 Yes, they do, and just about all project utilise performance measurement in some regards on

project today.

IP18 Yes, we adopt what is required on a project specific basis which are typically always the same

kinds of measures.

IP19 Yes, they do – the project can be monitored in the areas as required to suit the project.

IP20

Different approaches allow for different inputs. Commonly they are focused around delivering

the required product on the right date but the strategies allow you to adopt measures accordingly

to suit the project.



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Appendix N Relativity of Performance Measures



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ID Are performance measures reflective of the way the industry operates?

IP01

The key is the resources that are available and the ability of these resources to provide what is

needed. Time, Cost and Quality will always come into it, however it is about the measurement

of the people, who do a good job and have given us the result we wanted. Time, Cost and Quality

are always the benchmark, however there is more depth that could be given to the measurement

of people and relationships.

IP02

Yes, pretty well, the industry has come a long way in regards to technology however it still comes

back to time, cost, quality, safety, environment, community, stakeholder relationships. There are

still the main performance areas.

IP03

I think generally it could be done better. Projects typically have a standard template that has to

be followed. You get a score from 1 to 5. There always seems to be a reason or an excuse if

someone is performing poorly and this makes it difficult to really measure true performance.

Other methods used in major projects is more relationship performance, such as relationship

contracting but it doesn’t really get used much anymore. From experience with the RTA this has

worked well on some projects and worked very poorly on others.

IP04

Have not been directly involved in the field with Construction in Australia but previously in the

UK there was no performance measures on projects when undertaking construction supervision.

It has evolved but whether this reflects current practice, would not expect so.

IP05 There’s always going to be a need to measure quality, time and cost. Other measures are

subjective and can be introduced dependent on the project and its requirements.

IP06

This is not clear, there will always be a need to measure the projects performance against time,

cost and quality but whether the other areas reflect the way the industry operates is difficult to

ascertain.

IP07

Yes, but it can be difficult to get Contractor’s on board regarding performance measurement

especially on the smaller projects. It’s hard to get them focussed on risk management particularly

around public safety through construction sites.

IP08 Yes, because at the end of the day it always comes back to time, cost and quality.

IP09

The Contracting industry is a reflection of what’s thrown at them. If performance measures

weren’t there, no one would worry about it. The measures are not typically needed, for most

reasonable, responsible Contractors they would do what performance measures drive anyway,

with or without the measures.

IP10

From a local government perspective, no, trialled and tested first before adopting a new approach.

Scenic Rim did design and construct for certain type of bridge, written in that innovation but

then cost became an issue. More traditional approach was cheaper and whole of life costs were

cheaper under traditional. Whole of life, too much looking at capital cost not enough operational

costs

IP11 In general, yes they are but there are some operators who like to do things their way regardless

of the measures that are in place.

IP12 Yes

IP13

I think what we get monitored on is fair and reasonable. I think the issue with performance

measurement is that areas of performance that are supposed to help the industry by limiting who

can undertake work based on things such as quality systems and past performance are not being

taken seriously.

There’s Contractor’s winning work who don’t have the correct ISO systems in place yet they are

still awarded the work because of this price driven approach with a lack of focus on quality. I’m

not saying these Contractors can’t deliver a quality product, but without the correct certifications

etc, how can they demonstrate that they have these systems in place?



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IP14

I don’t have a definitive answer to that but from my perspective it has evolved and continues to

evolve. The level of performance and the measures of performance have changed and increased

to reflect new standards and information.

IP15

Yes, they typically provide sufficient measurement of performance relative to civil construction

projects. There isn’t a great deal that can be measured as such and it’s important to ensure that it

isn’t an onerous process by having excessive measures.

IP16 Yes, I think they are. They are relative to how we operate and it is reasonably simple to see the

areas of measurement against the different categories and what is required.

IP17

Yes, I think so. All the major elements of a project are typically covered under typically adopted

performance measures. I’m not sure what other areas could be measured. It’s important that it

doesn’t drill down too far but at the same time still keeps track of the major elements as this

assists in making sure these targets are hit.

IP18

If anything I think that we over monitor their performance in some ways. We have removed some

of their ability to make decisions based on what they know and their experience. We’ve hog tied

them to, in some cases, out dated standards and practices that are not necessarily the best way to

do things anymore. It is prescriptive to the point that when you ask them to change something

they can’t just do it, they have to go back to the designer or whoever it may be to get an answer

that we already know but we simply don’t have the freedoms to just make the appropriate

changes.

IP19 Yes, they are but some of the areas are subjective and difficult to report accurately on.

IP20 I think performance measures are fairly correct in the current industry and are reflective of the

way the industry operates.



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Appendix O New Areas of Performance Measures



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ID Could there be new area of performance measurements and in what areas?

IP01

Yes, everything needs to be looked at more so than just time, cost and quality. People and inter-

relationships are the key to making or breaking a project which I believe is more important than

time, cost and quality as these are dependent on the people and resources involved in the project.

IP02

No not really needed.

There is always someone using a different measure of safety performance etc. but the overarching

performance areas are typically good for the way things are done. Would prefer if more lead

indicators could be identified to assist in the prediction and mitigation before things even become

an issue.

IP03

Yes things are moving forward, previously you really only had two areas which were time and

cost, then quality started to come into it and now you’ve got other such as safety, community,

environment. I think now though the next level is to drive for greater project outcomes so that

when a member of the public sees a project they can appreciate a project and what has been

achieved. The way to do this is to possibly tie it to monetary benefits. It’s difficult because some

Contractor’s don’t care about that kind of thing whereas others like to walk away from a project

knowing that they’ve done a great job. If we could end up with everyone adopting this approach

that would certainly benefit the industry.

There’s areas for innovation that could be introduced and tied to monetary benefits, i.e. cost

saving sharing. Some Contractors introduce their own measures i.e. have competing teams on a

project that compete against each other to do the best job. But they key is setting a mindset of

doing a good quality job.

IP04

Possibly.

Time and cost should always be measured but there is always excuses that can shift the blame.

It’s not necessarily that new measures should be introduced, but further clarity provided around

how to measure elements. The issue is the subjectivity associated with many of the measures

used today.

IP05

Yes, I think so which ties in with earlier comments related to performance specifications as

opposed to prescriptive specifications. This is encouraged through some of the models such as

ECI.

IP06

No, not necessarily.

Our organisation already has a number of tools to undertake performance measurement. There

does not need to be a focus on new areas, more so a focus on measuring the current areas and

using the current tools to do this. They are not utilised enough but this also comes back to

experience and training. There needs to be greater training on how to measure the appropriate

areas, particularly in regards to specifications and there needs to be development of suitable

documents and checks that can be used to measure the areas. This also extends to what to do

with the data once you have it and how to make changes and learn from the findings.

IP07

Yes but as to which areas it’s difficult to determine. The other consideration is the cost of such

measures and whether they yield a substantial benefit to make it worthwhile. The other issue is

these measures can be manipulated i.e. a Contractor can nominate a team for a project but at the

end of the day, are those guys actually going to be dedicated to your project it will it be the

graduate do most of the work with marginal input from the nominated team member. You think

you’re getting one thing and end up with another.

IP08

Somewhat.

I think there could be more incentives incorporated to do things differently or strive for better

outcomes. Projects are typically always a thankless task with PM’s driven purely by a quality

product that is on time. If you’ve introduced anything else, well done but who really cares.



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Focussing back on the New Zealand Transport Authority, they actually have specific criteria that

rewards things such as innovation and bringing new approaches to the table.

IP09

Yes. Things such as community which are monitored now, what’s the real value? You always

get people who are particularly vocal and didn’t want the job to happen in the first place which

has nothing to do with you as a Contractor but you end up with a low score for your community

measure.

I think what would be better is a report on the Contractor from the Client’s perspective detailing

how you’ve performed on the job. That’s always subjective though dependent on the individual

who’s preparing the report.

IP10

From a local government perspective, I don’t think so much that there are.

I think it’s important though that these measures are kept up to date with current technology and

processes to ensure that industry performance is monitored relative to how it operates.

IP11

No, I can’t really see how else I would like to measure performance outside of the areas that are

already being measured. The big one is past performance and confidence in their ability to

deliver.

IP12

It’s not so much to do with performance measurement, it’s more to do with the project budget

and funding.

Innovation can sometimes be costly and you need to invest in the process, time and resources to

implement the innovation. With an understanding Client they may support this but it is a cost

issue.

It can take long term vision to invest in innovation and may not yield benefits until later in the

project lifecycle which can be difficult to get Client’s to see.

IP13

No not really. Contractors like us will always try and achieve the best we can. It’s how we

survive. You’ll always get rogue companies but that happens in every industry. We generally try

and value add and achieve the best we can for our Client’s regardless of the performance

measures.

IP14 I think it is done fairly well and that there are enough measures in place that it does work.

IP15 No not necessarily. The main elements are already being measured and again you don’t want to

over complicate the process or make it more difficult than it needs to be.

IP16 Not really, I think it is done pretty well.

IP17

No not necessarily. I think many of the major areas are already covered off and reflect the way

the industry goes about business. It’s important that performance measurement continue in

industry and that the way this is done, implement and utilised continues to develop with the

industry.

IP18 I think we need to go back to a bit more of a practical approach to performance measurement. I

don’t think there is an answer or a valid way to deal with it yet.

IP19 No not really. All the major areas are basically covered these days.

IP20 No. I don’t think so. It is being relatively well done now and the measures are reflective of

industry.



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Appendix P Impact of Performance Measurement



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ID Impacts of Performance Measurement on Civil Construction Projects

IP01

Unsure. Performance measurement that is undertaken concurrently with a project may not

change the result of this project as it is lag data, however it does provide an opportunity to make

changes to the current project to increase the performance or taking learnings and use them in

future projects. This comes back to one of the difficulties of analysing the data and then

implementing and using this data in an appropriate manner to yield a benefit.

Performance measurement from one project starts to inform the next. It’s more of a cumulative

process as opposed to an individual project thing although the knowledge that a project is going

to be using performance measurement could yield a greater outcome from the project as the team

understands that it is being monitored and measured.

If you take lessons learnt from previous projects, then yes it should deliver a better result on

similar projects in the future.

IP02

If it’s implemented well it improves outcomes, if you have KPIs there and they are monitored it

should generally lead to a greater outcome. Again, however, this comes back to the utilisation of

the data, how it is used and whether it is implemented.

IP03

It gives another set of goals for the project and that it’s not just focussed on finishing on time

and making money but actually seeing tangible outcomes in a project.

In NSW there is a lot of work being done on achieving best for project outcome – you have your

specifications as a minimum requirement but the focus is on achieving more than just this. An

example of this is independent project reviewer’s that come through once a month and review

the project independent of the quality records and looks for greater than minimum outcomes.

Definitely think that if a project has a focus on performance measurement and it is done well, a

greater project outcome will be achieved.

IP04

Hopefully it concentrates the Contractors mind on what the Client really desires and they will

try and achieve the scope and the objective of the project which should generally yield a greater

project outcome for both the Client and Contractor.

IP05

It depends on the ‘buy-in’ to the performance measurement process and what’s done with this

data. It may not necessarily change the project outcome more so just provide another record of

identifying what could have been improved throughout the project.

IP06

It will typically yield greater outcomes for the project and can lead to good relationships when

things are going well. It can achieve better value for money for the Client by ensuring the

Contractor is performing satisfactorily. It can also create additional costs for the Contractor i.e.

if a traffic measurable is not achieved, they may need to make significant changes to the traffic

management plan which can result in unplanned costs to the Contractor. Without a measurable,

things like this would go unnoticed.

IP07

It improves the project outcome as it provides a measureable against areas which, if done well

can deliver a greater outcome. By undertaking performance measurement in these regards it gives

the Contractor something to aim for and also creates the need for the Contractor to pay more

attention to the measured areas. Focus brings attention, which brings detail which can yield a

better outcome.

IP08

It is beneficial to the project because the checks and balances are in place. There are key target

areas that can be aimed for which ultimately help to produce a greater outcome for the project as

opposed to if these weren’t measured.

A basic example of this was a recent project that we were undertaking and a key performance

area was on the presentation and quality of the drawings produced. We prepared a set of

preliminary drawings which we were going to be assessed against. In review, it was clear that

these drawings were not of the detail required for a preliminary set of drawings so we took the



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time to correct this – had we not be getting specifically measured on this, we may have submitted

the drawings as they were.

IP09 If it is implemented well, it should have a positive effect on the project. But the key is that it

needs to be implemented well.

IP10 I think if the right performance measures are implemented then it should help to yield a greater

project outcome. This emphasises the importance of performance measurement.

IP11

Absolutely yield better project outcomes. I think everyone comes out happier as it typically

drives better results and outcomes for the project. In some instances, it may make delivery of a

project more difficult but if it is for the good of the project, than there is usually not an issue.

IP12

Performance measurement is just a communication tool more than anything. It gives direction.

You can’t underestimate the early warnings about how you are travelling and I follow this

religiously as it gives you a good heads up about how you are travelling.

In this regard it can help deliver a greater project outcome as it provides another monitoring tool

for the successful delivery of the project.

IP13 I think it definitely changes the outcome of the project for the better.

IP14

I don’t think it affects the outcome because at some point you have to deliver that outcome at the

end of the day. What it does impact on is how you get to the outcome. If everyone is performing

well and to the plan, it makes the delivery of the project quicker and easier.

IP15

I believe that performance measurement itself doesn’t change the project outcome, it is just a

means of monitoring the contractor and making sure they can maintain their pre-qualification

status. The way the contracts are set up means that this dictates the outcome and that the

contractor is compliant in regards to areas such as quality, traffic management, environment etc.

Performance measurement more so changes how the project is delivered, not so much what is

delivered.

The only thing that drives performance is dollars. A contractor will not do anything more than

what they are required to do, regardless of whether it’s being monitored or not. The way to drive

behaviours is to put a financial reward on it.

IP16

In one way or another we’ve always monitored performance but I think that if it wasn’t done it

could create a lesser outcome for the project as people would be aware that they aren’t under the

microscope.

IP17

It may not necessarily change the ultimate outcome that is delivered as at some point you need

to provide what you are being paid for but what it does effect is how you get to that outcome. By

having measures on performance and monitoring this well, it should help delivery of the project,

make for smoother delivery with less issues and assist both the contractor and the client in getting

to the finish line.

IP18 It doesn’t really impact on the outcome but it impacts on the way the project is run and delivered.

IP19 Ideally you should be able to deliver on time and on budget if all areas are being monitored

closely and it’s been done and acted upon well.

IP20

I think it can change the way the project is delivered and can change the project outcome. I think

it can change the outcome in a positive sense. It allows you to find out earlier if there are problems

and allows for a forum to make sure everyone is on the same page. I think it aligns the contractor

and client a bit closer and opens up discussion around the measures.



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Appendix Q Perception of Performance Measurement



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ID Perception of Performance Measurement

IP01

It is extremely highly valued but the problem has been with how do we gather it, understand it

and use it. This is still our problem now – how do we draw out the meaningful data of the project,

put it in a format that is sensible to use and how do we feed this back into the process. This is

not well done by us and there needs to be enhancement in this. It’s the feedback part and the

ability of the Contractors and Consultancies to take this, process this and then use it in their way.

IP02

Contractors are typically open to performance measurement and those that aren’t, typically have

performance issues. From our perspective, definitely open to performance measurement because

we know we perform well and this gives us a competitive advantage over our competitors and

assist with our pre-qualification. For a long time, performance measurement wasn’t taken

seriously and in some cases still isn’t as the data doesn’t get used as well as it should, but if it’s

done properly, the data is used well, it can be a powerful tool.

IP03

Generally it’s a pain. It can also be difficult if a Contractor is performing poorly as raising this

can cause arguments and things get rather adversarial. However, this more so come back to how

it is done – if it was done correctly and done well there would be less issues and better outcomes.

IP04 Very keen as they think it is of benefit for future award of projects, however this is not really

apparent, just want to make sure they achieve minimum standard.

IP05 There’s always going to be a need to measure quality, time and cost. Other measures are

subjective and can be introduced dependent on the project and its requirements.

IP06

It is generally perceived with a lot of suspicion as to whether or not it is fair to be measured by

contract administrator without quantitative real data regarding some of the areas that are

measured.

Within the last four or five year things have improved. Most Contractor’s say they support it

when they are being measured favourable however if things go south they become very

defensive. It creates conflict within the project and sometimes it is difficult to obtain the right

data to defend yourself. Some areas are black and white but many are subjective making it very

difficult to justify the decision making process. Contractors are often very protective of their

reputation hence defensive behaviour if the performance measurement does not reflect well on

them.

IP07

Seems to be difficult to justify the need to Contractors as it tends to come back to price and they

see it as an extra cost to the project that they don’t want to carry especially on the smaller projects.

This is understandable especially considering some jobs they just want to get in and out with

minimal fuss.

IP08

It’s a mixed bag but it’s necessary on projects however it needs to be consistent in the way it’s

measured and the way it is reported. Often the performance measures and processes can be in

place, but they aren’t followed or reported on or acted on effectively.

It would be good to have more structured performance feedback. TMR have systems such as the

Consultant Performance Report as do some larger city councils but you rarely get these. I’ve

found that over time, especially with a lot more people coming from overseas, they are not

familiar with the policies and practices of the agencies they are working for and do not know to

follow these procedures. Some of them have very little idea which indicates that although the

systems may be there, there need to be better training and skilling of government officers in the

use of these systems.

IP09

Just another task to be done. Just more contract administration. The administration required to

run a contract here in Australia is significantly greater than the vast majority of places around

the world. This is driven by the specifications, so many hold points, so much testing

requirements, the interaction with the Superintendent on site is of a very high level here. I’ve

done many jobs (in the UK) where the Superintendent hasn’t been on site, we only have a chat

when we really have an issue.

An example here is concrete – you have to have on site testing and on site slumps and the

Superintendent rep standing over you umming and arring about it slumps 90mm and its supposed



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to be 80mm and then they reject the load. Then they do their checklist and it’s tick, tick, tick, oh

hang on its two minutes over so that gets rejected – you don’t get this anywhere else. The testing

is done at the concrete plant, they have documented procedures and their accreditation stating

that the batch plant is certified and as long as it’s come from that plant then it’s ok and you just

pour it.

It tends to annoy you when you see a Contractor or completely stuffs up a contract and then gets

awarded the next one. This comes back to having gathered the performance data but done nothing

with it.

It works well until something goes wrong and then it creates conflict. It’s better than not doing

it because it allows both sides to see how the other side is thinking. For example, the main

Superintendent may not necessarily know what his guys doing on site and we can say “that bloke

is being difficult, he’ll watch us do something and then tell us we’ve done it wrong”. Why didn’t

he say something initially? It provides a forum where issues can be aired.

IP10 Is pretty well accepted and most companies typically have their own systems in place which

measure a lot of similar areas anyway.

IP11

Generally organisations, typically larger ones understand that there is a lot to be learnt from every

project. Performance measurement is typically expected in the industry and is not a new thing.

They come to expect that it will be implemented and compliance with KPIs etc will be expected.

The only ones who aren’t open to it are the ones who are performing badly.

IP12

The industry abides by the rules and the processes and policies that are in place. If the agencies

commissioning the works insist on performance measurement, then typically the industry is keen

to undertake and assist in the process as it is part of winning the work. It’s not costly, it doesn’t

take too much time, it’s fairly straight forward and you just do it because it provides a paper trail

and hopefully you get some good feedback so you can improve.

I think performance measurement is good but it’s only a part of project delivery and achieving

an outcome. It’s a paper trail but it doesn’t make the relationship any better or worse.

Performance measurement is a risk to Consultants and Contractors but it encourages them to lift

their game and do a better job. It’s a tool that will be used more and more to weed out poor

performing operators in the future.

IP13

I think if you don’t market you’ll never get anyway, performance measurement can help with

this. It’s all about smoke and mirrors in this world, we seem bigger than we actually are. I think

it’s a good thing. We do a lot of work for repeat Client’s and this comes back to them monitoring

us and being happy with how we’ve performed and hence awarding us more work.

We take it very seriously and we always utilise the Project Officer / Principals’ Rep as much as

we can to ensure we are meeting their expectation. We use them, to help us to make sure that it

meets their standards.

It can be made difficult by not only having to perform against specified measures but also

standards and legislation. What I read and interpret and what someone else reads and interprets

can be different and you might think you are doing everything right but in actual fact you aren’t

but it’s not because you didn’t try, it’s because your interpretation was different. I don’t think

anyone is right or wrong, as long as the job is progressing well and safely and the intent is there,

what’s the problem?

IP14 It is not new to anyone, people understand they get reviewed, they get monitored, they’ve got a

standard to meet.

IP15

I think they understand that it is part of project delivery and something that you have to do. It

also feeds into the pre-qualification system so if they want to maintain their status, they have to

do it.



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IP16

We regard this as very important for our business. In the past there has been issues around

subjectivity related to some of the categories but organisations are getting better at taking this

out by giving breakdowns of what each score reflects and what is required against each indicator.

I think performance measurement is good as it allows for issues to be addressed early and fleshes

them out rather than leaving them linger. With our sub-contractors they know that their

performance is always being measured so we can address any issues straight away.

IP17

Performance measurement is relatively common place these days and I think people have just

accepted that on every project your performance will be somehow measured and monitored. I

don’t really see an issue with it or why there would be as if you are performing well, there

shouldn’t be any issues.

IP18

I think people have started to gloss over when you mention the word QA and performance. The

issue is that it’s a grey area that often comes back to someone’s opinion and is an area of

subjectivity.

IP19

It’s just a part of delivering the project these days, some of the areas are difficult to measure but

that’s related to the subjectivity of the areas. I believe you need performance measurement so

you know whether you are or aren’t doing a good job. If you’re not performing as expected, you

need to know so that you can improve and change the way you are doing what you are doing.

Sometimes you don’t realise that you aren’t doing what the Client wanted as your thinking was

different to theirs, performance measurement addresses this.

IP20 I think that performance measurement is understood to be just part of the way we do business

now.



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Appendix R Issues with Performance Measurement



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ID Issues with Performance Measurement.

IP01 It’s not typically arduous but the difficulty lies in the analysis and response. Many layers can

impact on a particular element of performance which is why it is such a subjective process.

IP02

It is not generally difficult.. If the right systems are in place it can be easily done. On most of our

projects it is just an hour at the monthly meeting and going through and scoring each other’s

performance. Often also a good way to bring out and resolve any issues and build relationships.

On the flipside it can create tension and conflict if someone’s performance is not satisfactory.

IP03 Depending on the structure and process in place it can be difficult. It’s difficult when Contractors

are performing poorly as it creates arguments and adversity.

IP04

It is arduous when there is disagreement, when someone is not performing well. Opposite when

everyone is doing well.

In the construction industry it is very difficult because it is not black and white i.e. the

manufacturing industry is easier to measure because if something is being produced and 1 in 10

products are defective it is easy to measure performance related to defective products.

Construction is not like this, even on an objective measurable such as a date that something needs

to be completed – there are so many variables impacting on this that subjectivity is brought back

into it.

IP05

Not half as arduous as you’d be lead to believe if you listen to the grumbling of those that haven’t

completed their reports. Following the initial, major obstacle of setting appropriate measures,

further obstacles that make it all seem arduous:

1. Poor understanding of the need for / benefits of measurement

2. Poor understanding of the process for obtaining and recording measurements

Insufficient (usually nil) incentives to obtaining and recording measurements.

It’s difficult to find objective measures to subjective activities. If for example you are reviewing

the Contractor’s performance for the month and there are 65 RFI’s does this mean you have an

incompetent Contractor, a poor design with poor documentation, or a difficult Superintendent?

What also makes it difficult is that all parties need to understand what is being measured and

why it is being measured. The education process can be difficult because a Contractor will

immediately go on the defensive if a performance measurement is rated poorly because they may

not understand the background to why that area is being monitored.

IP06

It can be difficult if things aren’t going well. In these instances, you are often having to defend

yourself and the decision making process. It can be emotionally draining due to difficult

conversations with Contractors in environments that can already be high pressure and high stress.

It’s hard work emotionally.

IP07

It is not particularly difficult and is covered as part of the contract administration. The difficult

side of it is that it creates conflict if poor performance is being observed and addressed. There’s

always a million reasons, or excuses, as to why something may not be going as well as it could

be and this also makes it difficult to measure.

IP08 No it is not difficult, typically many of the areas should be part of your QA process and

procedures anyway and therefore are part of the everyday way that business is conducted.

IP09 Yes it is difficult. There are more arduous things on the job, but it is difficult. It’s just another

thing you have to do which takes your eye off the ball from delivering the job.

IP10

If you ask the staff that work for me if it is difficult, it would be a resounding yes because we

don’t typically have a lot of structure around it or systems in place to assist in the measurement.

People who are new to it will definitely tell you that it’s an arduous task. For council it’s a lack

of system and support tools to help us do this on projects. This comes back to cost because the

system we are using has a module there for performance measurement, but to develop that



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module has a large cost associated with it. Currently this is not budgeted in council’s budget.

Systems such as these don’t win votes on election day, it’s the projects that have been delivered.

IP11

No it is not necessarily difficult. No project ever runs smoothly and performance measurement

is just part of this process. Generally, a good Consultant or Contractor will take each project as

a pre-start to winning some more projects so they are typically open to performance

measurement.

IP12 Performance measurement is not a difficult process.

IP13 No it is not difficult and is just part and parcel of delivering the project.

IP14

It can be, because a lot of it is not within your control. In some cases, I have found that the

performance measures have been extensive and lengthy and can take a lot of time to monitor and

undertake.

It is also made difficult in terms of the relationships that you build when contractors aren’t

meeting satisfactory levels of performance due to the conflict that it can create. The key is to

quickly identify the issue to avoid potentially increasing the impacts at a later stage in the project

which is possible through monitoring performance.

IP15

It can be difficult if when dealing with poor performance due to conflict. The issue is that many

of the performance measurement systems are a consensus system where the client scores the

contractor and the contractor scores themselves and then you meet in the middle. So it isn’t truly

reflective of the client’s perspective on the contractor. It’s a compromise, whereas if you didn’t

have to agree, you could have a true position of each person’s thoughts.

IP16

It’s pretty straight forward. It typically only takes about half an hour a month to complete the

performance surveys so it is pretty simply.

Our sub-contractor performance scoring system only takes about 10 minutes to complete so again

it’s simple due to our structure system and processes. We have got tools in place to support our

staff in undertaking these processes.

IP17

No I don’t think it is difficult. On most of the projects that we do, our clients are of a larger size

and typically have the systems and procedures in place to undertake performance measurement.

Some of the smaller councils don’t tend to have the same level of systems or emphasis on

performance measurement, but this could be a reflection of the size of the projects that these

organisations do which are typically of a small nature.

IP18

In my experience, the measurement of performance for civil construction contractors is the most

difficult discipline to measure because of the openness of many of the tasks that they are required

to undertake and difficult in defining a black and white measurable.

It’s also made difficult because so often you will do it and the client or the clerk of works will

come back and say I don’t agree with how you’ve measured our performance or how you’ve

justified your measures or how you’ve come to that conclusion. It can become a very cyclic

argument that you may never be able to formally close out in some regards. This then creates

tension between the contractor and the client.

IP19 No, it’s pretty easy. You just have your monthly reporting and it makes it easier for you as you

know where you are sitting in regards to the delivery of the project.

IP20 It depends on what level of performance measurement is implemented. Some clients take it too

far, while others don’t take it far enough.



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Appendix S Innovation Through Performance

Measurement



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ID Do current performance measures encourage innovation and if not, what can be

introduced to encourage this?

IP01

No – a Contractor is going to be looking to make money. Innovation and drive comes out of

financial desires for themselves not driven by performance measurement. A project could be

setup through the procurement to state that the Contractor needs to come up with innovative

ways and ideas to deliver the project. This could be driven by financial benefits, i.e. savings

resulting from the innovation will be split equally between contractor and client.

Yes, because without them how can innovation be measured and comparisons and learnings been

made from previous projects.

IP02

Probably not, unfortunately. TMR has been grappling with this for a number of years to provide

incentive for Contractors to come up with innovation but the issue is Contractors want to know

that their intellectual property is being protected and that they get benefit out of it as well. If there

is no tangible benefit for the Contractor, they will not pursue it.

TMR starting to talk about new clauses and conditions of tender around innovative proposals

where you put forward an alternative and if it is accepted there is a 50/50 share of cost savings.

The problem is, TMR has a culture of doing things the way they have always done it and trying

to get innovative and new ways of doings things over the line is a real challenge and Contractors

end up throwing their hands in the air and give up. Unfortunate as there is a lot of efficiencies,

cost savings and other tangibles that could be gained but it’s a very hard process to try and prove

and get things done differently.

There is incentives that can be used, recognition of innovation in their procurement strategies

through non-price criteria around innovation and looking at demonstrated project with

innovation and alternative. Although it is a buzz word for the department, it is not really

embraced. I’d like to see it embraced as we see it as one of our key differentiators as a business

– we have some really clever guys that come up with good solutions but we often don’t get to

show and implement this.

IP03

Very rarely. Typical contract arrangements don’t encourage this nor really pursue it.

Certainly think that performance measures should be introduced to encourage this. This needs to

be driven by the procurement approach, i.e. a D & C allows for a greater scope of innovation

when compared to a construct only where everything is basically already pre-defined. Strategies

such as D & C and ECI allow for collaboration between the Contractor, Client and Designers to

pursue innovation early and provide costs savings which help to demonstrate that costs related

to innovation are worth pursuing.

IP04

Contractors do genuinely try and innovate but this is primarily financially driven for themselves.

Some of the design and construct they do try and encourage innovation through cost saving splits.

The issue, especially with government, is that they have taken conservative to a new level in

regards to innovation. As soon as a Contractor or consultant tries to innovate or suggest

something, the organisational branch responsible for this area says no. The government in

Queensland is extremely risk averse and not willing to take on any risk.

In Queensland the approach to innovation is terrible, in the UK they were more open and willing

to accept innovation. Julian Mitchell who is the head of E & T branch stands up for innovation

and states that they want innovation but the message does not filter down.

This can be changed, it was noticeable that when Campbell Newman was elected, there was a

whole different attitude from the branch regarding engineering and technology on the approach

to innovation as it was driven from the higher levels. They were more willing to look at

innovation and accept it. However since his departure, it has started to revert back towards the

old view and is becoming extremely difficult.

It is especially bad here in Queensland and is the worst I have seen throughout my career across

the UK and Australia.



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The only thing seen successful is when it is politically driven from the high levels and part of

government strategy and enforced. This could then flow through to performance measurement.

IP05

The answer is an emphatic “No!”

Some contractors are very innovative and entrepreneurial in their techniques for maximising the

returns they are seeking from the project. The client might call it devious or opportunistic; but

from the contractor’s perspective it is smart. This however is not to the benefit of the Client.

Adoption of performance specifications as opposed to prescriptive specifications would breed

innovation as it is in the interest of the Contractor to be innovative to deliver the cheapest product

while still achieving the desired outcome.

IP06

No, innovation from the Contractor is purely for them to improve their bottom line, not

necessarily benefit the client or achieve a greater outcome. The difficulty with innovation,

particularly under construct only contracts is that it will typically require a departure from the

design or specification which creates a whole number of headaches regarding design changes

and approvals as well as delays. With D & Cs there is more opportunity to innovate but again it

is rarely encourage from a performance measurement perspective.

Innovation alone could be written into the strategies and measured to encourage the pursuit of

innovation. There is somewhat of an opportunity to do this when tendering in that an alternate

tender can be submitted however this is often difficult as the amount of time the Contractor has

to tender is usually short making it difficult to explore innovation.

A way of doing it is to introduce something into the schedule that allows for innovation. This is

difficult though as our specifications often over specify, and are very prescriptive providing little

flexibility. Our organisation stifles innovation through prescription and there is a trust issue with

contractors to do the right thing given that at the end of the day, it is public infrastructure.

IP07

No, not necessarily. The problem with the construction industry is that there are tried and true

techniques that deliver all the time. For a council like us, it is difficult to justify trialling new

techniques due to the cost risks associated with this and the fact that we have limited budgets

and these must be justified. Prefer to allow someone else to trial it before looking into it.

Everyone seems to talk about innovation but innovative pursuits are rarely undertaken. Comes

back to risk.

It would be good to just see innovation in general but again it comes back to risk. We’ve looked

into things in the past regarding replacement of our old wooden bridges with fibre composite

bridges but then this opened up a whole new issue of who had experience with these, who could

deliver. Same thing with foamed bitumen pavements, reasonably innovative but not often used

and issues associated with cost compared to more traditional pavements.

IP08

No, a lot of time agencies can tend to see innovation as a short cut, a reduction in standard from

the norm or a reduction in the quality of a deliverable. Need to be careful that innovation isn’t

perceived as doing less which can sometimes be the case.

Innovation does not tend to be rewarded. It is talked about in government agencies and they talk

about using engineering judgement and looking outside the scope of design trends and

developing projects to use as monitoring sticks however there is a disconnect between the upper

levels with this thinking and the PM’s delivering the projects who come back to wanting a quality

product that is on time. There’s a disconnect between the management message to what is being

done on the ground. You suggest stepping outside the design standards and people get cold

shudders. This is where innovation is stifled. It’s a pity because there is real opportunity there.

One thing that needs to be done is the agencies themselves need to get in some quality people to

demonstrate that they are serious about it. For example, hiring people that are leaders in elements

of the industry that can drive the teams and put out the message that we’re really open for



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business to do things differently. This message can come from industry all it wants but if these

agencies are not receptive to this it just hits a block wall.

There also needs to be a release of control in that some of the risk sharing and financial benefits

are shared onto Consultants and Contractors for developing techniques that are innovative and

could reduce construction costs, maintenance costs, increase asset life.

At the moment there is no incentive.

Too often the standards are applied in a prescriptive manner more so than being looked at as a

guide. Government agencies are extremely risk averse and will avoid at all costs.

IP09

No they do not. There’s nothing in there to specifically measure innovation.

It would be good if there were reimbursement incentives to drive innovation to get some

recognition to say that “hey you’ve saved us $100k, he’s a portion of it”. Often we can save a

Client million but there’s no recognition of it.

Purely a simple measure against innovation would be good.

IP10

From a local government perspective, no it does not. This is based on risk in that we are not that

open to new technologies and processes etc until they have been proven by someone else who

has shown that it is successful. We can’t go out and be the first to trial new things which could

fail and we have just spent a large amount of tax payer dollars in doing it. Traditionally very

conservative in local government from that perspective because we aren’t looking for that new

technology etc.

We trialled a design and construct contract out for a new bridge whereby we had a typical

approach to what type of bridge it would be but in the tender we asked for innovative alternatives

for the bridge type. Tenders came back in with alternatives but then cost became an issue and it

proved much more cost effective to go with the traditional approach.

In saying this the industry tends to look at capital costs as opposed to whole of life costs and can

sometimes miss the benefits that could be achieved through alternatives. This could be a result

of local councillors only looking as far ahead as a four-year term and it’s about today in regards

to cost not 10 years.

I think performance measurement could be used to drive the industry to change but how this is

done or what measures should be used is difficult to define.

IP11

In some ways yes. We will sometimes write into our briefs that alternatives solutions and

methodologies are welcomed that can achieve better outcomes or reduction in costs. We can

allow for this in our weightings, i.e. time saving innovations can be awarded through the time

weighting in the assessment process, not necessarily through a specific innovation weighting.

IP12

No, but there is a government incentive in the research and development area where if we

innovate on a project there is tax incentives from the ATO that can be received. Yes you may

not get money from the Client but you can account for this as a cost offset.

IP13

Not overly, from our perspective innovation is driven by our business model. If we can value

add to a project and have the Client appreciate this it often means they’ll use us again. Next time

they have a difficult project, they’ll come to us.

It comes back to pain share, gain share. Often with innovation you can provide a cost saving but

this then impacts on your bottom line also. Why would we do this unless there is some incentive



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there for us to do that? We’ve used innovation in the past to not only save Clients money but

also build relationships but it would be good to see financial benefits for us as well.

An example of this was we were doing work for a private agency in which we were able to save

them $100k on a car park they needed constructed. This $100k was put towards completing other

works which they gave to us. This is an example of how you can be rewarded for seeking

innovation at the benefit of the Client.

IP14

They can, through adaptive management to a job as you may be able to find a better way of doing

something and still hit the performance targets.

It is not necessarily the measures that will encourage this but the openness of the client to accept

changes and be willing to allow exploration of new techniques or processes.

IP15

No I don’t think it does.

I don’t think performance measurement can have any input into innovation. I think this can be

achieved by the adoption of the appropriate procurement strategy that provides the necessary

freedoms to allow for innovation. What drives innovation is the dollars in the pocket of the

contractor, not performance measurement. There’s very little room for innovation once

construction has started, innovation is in terms of the design of what you’re building and the

materials. Construction techniques are very much optimised so I think there’s little room for

innovation in this respect.

Performance measurement won’t drive innovation because in a way, it’s after the event.

IP16

No not typically. There has been projects in the past with a particular emphasis on innovation

which was encouraged through cost saving incentives – if we saved on direct job costs, we got

half of the savings and the client got half of the savings. This resulted in some very good

outcomes. On our current project, there is nothing that encourages us to come up with innovative

techniques or solutions so therefore we will not be pursuing this on this project.

Our approach to innovation will always be based on incentives.

I’m not sure if this could be done through performance measurement, more so through the

adoption of an appropriate strategy such as design and construct which provides the opportunity

for the contractor to become involved at an early stage.

I like the idea of performance driven specifications however the problem is you sometimes don’t

know all the issues surrounding a project and can miss things. There’s example of where this

works and where it doesn’t. I don’t think there is one across the board solution, each project

needs to be considered individually. I’d like to see it move towards more freedom for the

contractor, I prefer it this way.

I think a way of doing this is through the design and construct approach as it gives us the

opportunity to get involved early and come up with other ways to make things work that ends up

saving both us and the client money.

IP17

No not really. Innovation is a difficult one as no one really wants to be the ‘first guy’ to try

something out as it can potentially cost large amounts of dollars and may go wrong.

Difficulty also arises in that new techniques or processes etc. have to go through a large amount

of red tape before they can be trialled as they may not necessarily align with current requirements.

This then creates time issues on projects that simply can’t absorb this kind of red tape.



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There could potentially be a measure placed on what new technologies, or processes were

brought to the table by the contractor during delivery but again, during construction there is little

time or opportunity to be trialling this.

I think a better approach is for the agencies to drive this and to do it through their approaches to

procurement. This relates back to the previous questions regarding a design and construct

approach. This approach allows the contractor to become involved at an early stage, have input

into how things could be done better, or more efficiently, or using alternate products. This is

where the innovation could be bred. It’s important to that incentives be tied to this as there are

potential costs associated for the contractor in pursuing these innovations and he should be

compensated accordingly if dollars can be saved by the client.

IP18

No, it basically means that they are going to stick to the bare minimum to achieve what is required

of them, achieve sign off and protect their insurance.

There are ways but it needs to be implemented through the procurement strategy not through

performance measurement. This comes back to saying to the contractor, if you find yourself a

cost saving or a way to do something better that is more efficient, gives a better result, last longer,

we will give you X percentage of the savings that you can put on the table. It has to be monetary

or it’s not going to get their interest.

IP19

No, I think it’s the opposite. It’s stick to what you know, don’t introduce any risk and deliver on

budget. Don’t change anything. There is such a focus on time, cost etc. that there’s no room to

be creative or take on some risk and spend a bit of money. It’s too strict to be able to innovate.

The prescriptiveness of the specifications, drawings and documentation that we are required to

operate under basically stops us from being innovative. The government steers away from risk,

the typical approach is, it’s worked for 30 or 40 years, we’ll stick to what works. You can always

bring things up in the constructability review but it’s pretty limited in regards to make changes.

In this climate they don’t really want to take risks.

The government does try to promote innovations through awards and that kind of thing but really

the innovation needs to come from the design phase. This is why D & C is good because, as the

contractor, you can make changes to various elements of the design such as the pavement where

you can still achieve the desired outcome, but you can do it a better way.

IP20

A lot of the opportunity to be innovative is available at the tender phase and design phase. Once

you’re in construction, innovation costs you time and/or money so the opportunity is limited.

The other issue is that when you are in the construction phase, innovation will rarely benefit the

client as the contract is set so therefore they aren’t interested in pursuing it. There could be better

ways of sharing the benefits of innovation, i.e. cost savings, time savings.

Cost incentives will always drive innovation. It’s difficult to be innovative during the delivery

phase, performance measurements in place or not. I.e. you might be able to utilise an innovative

product but a lot of clients don’t allow new materials without a whole heaps of testing etc. which

is not possible in the timeframes for most projects.



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Appendix T Industries Ability to Change



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ID Have you found that the construction industry is typically slow to change, develop and

adopt new process or techniques that could improve performance?

IP01

Yes, there’s always a continual drive to do things faster and cheaper and anything that can be

trialled to try and achieve savings in these areas is usually done. In saying this, the industry is

typically conservative and cautious when it comes to new processes and techniques but typically

once these become relatively proven they are rapid to adopt these – it always comes back to cost.

Conservative and cautious to outlay costs to try new techniques and processes due to the potential

for it to fail, but once proven, rapid to adopt.

IP02

It varies, the industry is rather good at adopting new technology, but new processes and

techniques not so good. A lot of people in the construction industry have been doing it a long

time and are set in their ways. Difficult to get them to change the way they do things. MCE faced

a real challenge moving from private clients to government clients which placed a whole

compliance burden on MCE resources. Trying to get them to embrace a compliance type culture

that team require is a difficult challenge. For the industry, change is difficult, technology is not.

IP03

The government is definitely slow. They are not open to any new construction processes or

techniques. The industry itself certainly moves quickly when it’s allowed to but it depends on

the client’s openness to this.

We’ve tried to adopt things on QLD TMR projects that are used overseas all the time and would

really help us but because TMR hasn’t seen it before they aren’t interested at all in allowing us

to use it. Even procedures that have been used across the border in NSW, TMR aren’t interested.

How do you get a new process started when they won’t even let you trial it, it’s unbelievable

really.

Overseas you see processes and read things which demonstrate how far behind we are with our

processes in Australia. Even moving from NSW to QLD I have found that QLD is quite behind

NSW in a lot of areas. In some areas QLD are slightly ahead but in many areas they are behind.

I feel that when I come up to a project in QLD I take a step back in time to some extent.

IP04

Contractors do genuinely try to innovate, use new techniques and develop alternative processes

but they are stifled by governments which slows the process. The other thing stifling innovation

and change in the industry is so many different design standards and specifications across the

country and states. In the UK there is one common design standards allowing Contractors to

move freely and undertaken works throughout the whole country easily. This stifles innovation

as a technique used in NSW cannot be used in QLD because the specification has different

requirements. This makes it difficult for the industry to change.

IP05

No, they are much quicker than clients however the operation of the industry under such a

prescriptive environment makes it difficult for them to change or adopt new techniques as the

industry keeps dictating how things are to be done. We typically tell them what we want and how

to do it which stifles change because it is always the same processes.

The other thing that stifles this is the tender process. The pre-construction phase can go on for

years and then we only allow a typical tender period of four weeks which allows no time to try

and develop innovative alternatives and delivery processes.

IP06

Yes, the industry is very generational in that techniques and processes are hand down from

generation to generation with processes that are very traditional. While technology has changed

a lot in the last 10 years, the processes and techniques are very similar and familiar. This is

heavily influenced though by the customer side in that the restrictive design and specification

requirements require sign off by management if there are departures from the norm.

IP07

Yes absolutely. But it is different for everyone. I’ve found with our organisation it is extremely

difficult to change the culture. Things have been done the same way forever and people don’t

want to change. Some people are prepared to innovate but at the same time I’ve been hammered

when trying to bring in new ideas. It’s a human comfort thing and you often receive pushback.

People are also jealous and people don’t want to be shown up by the ideas of others.



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IP08

The industry particularly Construction Contractors seem to be innovative and very adaptable as

they need to be as the game is always changing.

From a Consultant perspective the industry has moved towards a bowling alley approach in that

let’s put up the bumpers and protect the general public from themselves as much as we can. In

doing this we’ve dumbed down people’s ability to sit within an environment to make smart

choices, for example making drivers less aware of what’s around them i.e. motorway off ramps

that can be hit at 110km/h which then gradually slows them down via diminishing curves etc.

You should be able to just put a fairly short exit curve and make the driver think about what they

are doing – I’m exiting the Motorway, I need to slow down and prepare to do this. We don’t use

our infrastructure efficiently.

Despite all this, we haven’t significantly reduced road crashes and loss of life on the roads but

we’ve certainly increased design costs and construction costs. There’s need to be more of a focus

on changing drive behaviour as opposed to providing ever greater infrastructure to try and

accommodate the drive behaviour. An example of this was the cyclist campaign whereby

depending on the speed you need to give 1 to 1.5m of space. As a cyclist I have noticed a

significant change in driver behaviour since this campaign where drivers are more aware of

giving you the space.

IP09

Yes it is incredibly slow, driven by the Client. Contractor’s are often very quick to pick up

advancements in plant and bits of kit, technology etc but on the Client’s side they are very slow

to change. The Client often lags behind the Contractor.

An example is foam bitumen pavement in which Queensland thinks it’s ahead of the rest of

Australia which it probably is, but this is two decades behind the rest of the world. They quiet

frequently go out to reinvent the wheel that’s already been invented somewhere else.

Yes there needs to be a balance between rushing in and doing things and applying due diligence

to things but it’s too slow here. The current approach stifles the industry in that things that are

true and tried elsewhere can’t be used here. It would be good to see performance driven

specifications instead of prescriptive specifications which they drive now. An example was on

Kingsford Smith Drive, whereby we asked a question of could we do it this way, the response

was the BCC document, Clause x, states that it has to be this, so no you can’t – even though there

is nothing wrong with the alternative. Another example was a job out west whereby the stone

specified was a Type 2.1 but when you go out west far enough you can get 2.1 The specification

stated 2.1 and we can cart it 500km to get it but does it really need to be a 2.1 or could a 2.3 have

been used.

Too much of picking up the rule book and drawing the picture as per the rule book and that’s as

far as the engineering though goes. It’s not engineering, it’s simply documentation. The silly

thing now in Queensland is there’s no consistency with standards. For example you can do one

job that can be governed by Austroads, TMR standards and BCC standards where you end up

with three levels of specifications you need to comply with and then they need to tell you which

one trumps the other – it’s really easy to get caught out, because one will say x and one will say

y and you are supposed to construct to the higher standard but you missed it. It seems to be

getting less clear rather than more clear even though they seem to be trying to move towards

Austroads. Yes they might be trying to transition to a better approach, but in the meantime it’s

worse.

There’s an issue in the application and perception of standards in that they are often looked at as

cast in stone when really they should be used as a guide. A classic example one was several years

ago where we had an off-ramp off the Bruce Highway. It was only going to be in place for 18

months and it was only taking 100 cars per day. The design standard said that “they shall not

build the ramp at a grade steeper than 7%”. Now this was an ideal, that’s what you’d like to

achieve. Well the result of this meant that there would be a height difference of three metres

going from the old Bruce Highway to the new Bruce Highway so you couldn’t build it. In the

end we had to build an RE wall and grade it all the way out to provide the connection. 18 months



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later it was demolished and removed. To do this also required multiple side tracks to implement

the solution when all that was required was to change the grade to 7.2% grade which would have

resulted in huge cost savings.

The way the industry is going is that designers aren’t actually designing anything, all their doing

is looking at the rule book and drawing what the rule book says. That’s not real engineering input

and that’s not achieving value for money.

A number of years ago and is still the case now, a number of people at the top of politics and

agencies such as TMR were preaching best for value and looking at the standards and stepping

outside the box but that’s as far as it gets. It gets to the middle layer of bureaucrats and none of

them want to take a risk because it’s their backside that they’re worried about and not the money

because the money is the tax payers.

We are over constructing our infrastructure. From my perspective of the time that I’ve been here

compared to that spent in the UK is that the country is paying way too much for its infrastructure

and it’s not all about high wages. You’ve got a double hit here where by the cost to do the work

is high compounded by the specified work is high cost. It’s nuts.

I think Australia in general borrowed a lot from the UK regarding the administration and delivery

of construction projects and that has resulted in the industry being as it is today.

IP10

Possibly from a design perspective because Engineer’s are typically conservative, particularly in

local government. You’ll attend industry briefings and conferences and they’ll have new

technologies etc. on display and then the following year the same things are on display and still

no one has really implemented them.

IP11

Over the last two decades the industry has become very dynamic. This seems to be partly

attributable to bright, young engineers coming up through the ranks who have come out of a

different egg shell in regards to technology and the environment in general. In a way it is almost

arrogant in some regard with the new approaches being brought in and an attitude of let’s try this

or I want to do it this way but at the same time this brings about change. No one likes change

but it is inevitable however change does not always mean progress.

IP12

I think that businesses generally move with the time and there is no time to be complacent or

continue to do things the way it’s been done 10 years ago. The industry generally moves with

the times not only with technology, but how we build teams and deliver projects. Right now in

the current construction market businesses are changing to be as lean and mean as possible due

to the current conditions of the economy.

I think technology is a wonderful thing that most of the industry embrace, looking ahead five to

ten years from now, technology has a lot to give us in regards to quality and time.

IP13

The whole industry is very cyclic and that has been very turbulent over the last 10 years with the

GFC and change of governments a couple of times now in Queensland.

The construction sector is a hard game. It’s hard physically, it’s hard mentally, and it’s a tough,

tough industry. You don’t just knock off and switch off in this industry. There has to be change

in the industry, it is currently such a volatile market that Contractors are living on the shirt tails

of the next project. Gone are the days of making 10% margin on a project and when you are

delivering millions dollars job and coming away with less than 10% why bother? There is so

much management required now to keep a company alive and often these can be out of your

control. Things like poor documentation can make or break you, ridiculous time lines. But at the

end of the day it comes back to making smart business decisions.

One of the issues is the Australia market has priced itself out of the game in regards to labour.

It’s cheaper to import products these days.



Luke Seeney

273

The industry is stifled by red tape. You’ve got to go through three levels of red tape with

everything you do. Federal, State and Local tape. We should move away from state governments,

have a solid Federal arm and then let local council handle the rest. To do this though would

require the merger of more local councils into larger councils similar to that of the large city

councils like BCC and CGC. These councils are capable of handling their needs without the input

of state government.

IP14 I would say that the industry has adapted as time has gone on, willingly or not. They tend to do

this relatively quickly and they basically need to in order to keep pace in the industry.

IP15 No not really, I think the industry responds and adopts well as contractors need to in order to be

able to survive in a free market.

IP16 Not generally, especially the larger companies. It’s not within their interest to resist industry

change otherwise you’ll fall behind and you can’t afford to do this.

IP17

It can be, especially in regards to some of the old construction methodologies etc but normally

if a new piece of technology or technique comes out that is proven, it will often be picked up

rapidly by the industry.

IP18

Yes, I have found it slow to change. Really nothing has changed on these sites other than safety

type measures in probably close to 150 years. Everything else that is around here I can find you

in a catalogue somewhere from the turn of the century.

IP19 Yes, the industry is slow to change. The theory is, what worked back then still works now, if it

isn’t broken don’t fix it.

IP20

I think the industry isn’t that good in this regard due to the time taken to prove up new things or

the time that government clients require to see this proving up makes it prohibitive on projects.

If the government wants to pursue or encourage innovation, they need to be doing this constantly,

not waiting for a project to do this for them.

I think the government approach to standards and specifications stifles the industry. Their

approach to risk also potentially contributes to this. For instance, something might go wrong on

one project, so they change the specifications to avoid this happening again and add in another

factor of safety.

Documents

Project Performance Measures for Civil Construction Projects ...and civil engineering construction areas alone. Figure 1.1 2014 forecast annual percentage change Source: Australian